Appendix — International Brotherhood of Teamsters v. Great Coastal Express, Inc.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1982

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Petitioner,

v.

GREAT COASTAL Express, INC.,

Respondent.

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

RoBert J. HIGGINS

IRA R. MITZNER

(Counsel of Record)

Barry WM. LEVINE

GEORGE KAUFMANN

DICKSTEIN, SHAPIRO & MORIN

2101 L Street, N.W.

Washington, D.C. 20037

(202) 785-9700

Attorneys for Petitioners

WILSON - Epes Printinc Co., Inc. - 789-0096 - WasHINGcToN. D.C. 20001

2

Appendix A

Appendix B

Appendix C

Appendix D

Appendix E

Appendix F

Appendix G

Appendix H

TABLE OF CONTENTS

Opinion and Order of the united States

Court of Appeals for the Fourth Cir-

_ ff ü

Order of the United States Court of Ap-

peals for the Fourth Circuit denying

rehearing (July 1, 198)

Memorandum of the United States Dis-

trict Court for the Eastern District of

Virginia (August 27, 19817)

Opinion of the United States Court of

Appeals for the Fourth Circuit (Decem-

K 8

Order and Memorandum of the United

States District Court for the Eastern

District of Virginia (February 29,

—KK— W

Memorandum of the United States Dis-

trict Court for the Eastern District of

Virginia (November 22, 1972) ..............

Opinion of the United States Court of

Appeals for the Fourth Circuit (Janu-

gg ere

Order of the United States Court of Ap-

peals for the Fourth Circuit (Novem-

ECC

1a

47a

49a

76a

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 80-1217

GREAT COASTAL EXPRESS, INC.,

Appellee,

V.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Appellant.

No. 73-2393

No. 73-2448

GREAT COASTAL EXPREss, INC.,

Appellee-Cross-A ppellant,

V.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Appellant-Cross-A ppellee.

No. 81-2073

2a

GREAT COASTAL Express, INC.,

Appellant,

V.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Appellee.

Appeal from the United States District Court

for the Eastern District of Virginia, at Richmond

Robert R. Merhige, Jr., District Judge

Argued : January 7, 1982 Decided: April 12, 1982

Before BUTZNER, Circuit Judge, INGRAHAM,* Senior

Circuit Judge, and RUSSELL, Circuit Judge.

Ira R. Mitzner (Barry Wm. Levine, Kenneth M. Simon,

Jeffrey M. Simon, George Kaufmann, Dickstein, Shapiro

& Morin on brief) for Appellant; J. W. Alexander, Jr.

(Blakeney, Alexander & Machen; James M. Minor, Jr.,

Minor, Marshall, Forb & Batzli, P.C. on brief) for

Appellee.

INGRAHAM, Circuit Judge.

These proceedings were initiated by the International

Brotherhood of Teamsters, Chauffeurs, Warehousemen

and Helpers of America (“IBT” or “the Union”) in an

* Honorable Joe M. Ingraham, Senior United States Circuit Judge

for the Fifth Circuit Court of Appeals, sitting by designation.

3a

effort to obtain relief from a judgment the Union argues

was procured through fraud on the court. In No. 80-1217,

IBT appeals the denial by the District Court for the

Eastern District of Virginia of its Motion to Set Aside

Judgment on the grounds of fraud on that court. Great

Coastal Express, Inc., v. International Brotherhood of

Teamsters, 86 F.R.D. 131 (E.D. Va. 1980). In Nos. 73-

2393 and 73-2448, the Union has filed an original peti-

tion in this court for relief from our affirmance of the

underlying judgment, Great Coastal Express, Inc., v. In-

ternational Brotherhood of Teamsters, 511 F.2d 839 (4th

Cir. 1975), cert. denied, 425 U.S. 975 (1976), on the same

grounds.“

This dispute arises out of a 1970 strike by IBT against

Great Coastal. Great Coastal subsequently brought suit

against IBT on two theories: (1) damages to property

and equipment caused by union violence; and (2) lost

business caused by illegal secondary boycotting. The

union violence claim was eliminated from the case by

directed verdict at the close of Great Coastal’s case in

chief. The jury then awarded over $1,000,000 in damages

on the secondary boycott claim, which prompted a new

trial on damages alone and a second, reduced verdict. The

judgment was affirmed as to both liability and damages

by this court. Great Coastal Express, supra. IBT sub-

sequently uncovered evidence that the company itself had

planned and executed several of the acts of violence de-

scribed during the suit, and petitioned the district court

and this court for relief from the judgment. The district

court concluded that company witnesses had indeed per-

jured themselves in the original trial, but that such facts

1 We also have No. 81-2073, an appeal by Great Coastal Express,

Inc. (“Great Coastal” or “the company”), plaintiff in the original

suit, from recent findings the district court has made to supplement

the record at our request, and a motion to dismiss that appeal.

No. 81-2072 » nd the motion to dismiss have been considered together

with the consolidated proceedings.

4a

did not constitute a fraud on the court under Hazel-Atlas

Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 64 S. Ct.

997 (1944), or support an independent action for re-

lief. For reasons developed below, we affirm the denial of

relief and deny the direct petition in this court.

I. Background

A. History of this Litigation.

Great Coastal is an interstate truck carrier based in

Richmond, Virginia. In 1970, the company’s employees

were represented by Local 592, an affiliate of the IBT.

From 1964 to March 31, 1970, the parties were signa-

tories to the National Master Freight Agreement. Nego-

tiations for a new agreement were unsuccessful and local

592 went on strike in August 1970. On December 10,

1970, Great Coastal filed an action in a Virginia state

court which was removed by IBT to the Eastern District

of Virginia pursuant to 28 U.S.C. § 1441(b), as an ae-

tion purporting to state a claim under § 8(b) (4) of the

Labor-Management Relations Act, 29 U.S.C. 158(b) (4),

over which the United States District Courts have original

jurisdiction.

The case was tried before a jury on the two theories

described above, damages caused by union violence and

illegal secondary boycotting. From the outset, union coun-

sel objected to the introduction of evidence of violence

that was not shown to be connected to the union. On the

proffer of Great Coastal that all such evidence would

ultimately be linked to the IBT, the district court per-

mitted the company to go forward. Company witnesses

testified to wide-spread and savage acts of violence di-

rected towards its employees and property. At the close

of the company’s case, however, the district court granted

the union’s motion for directed verdict on the violence

claims, holding that the company had failed to meet its

burden under United Mine Workers v. Gibbs, 383 U.S.

715, 735-37 (1966), of linking the acts of violence to

5a

IBT. The secondary boycott claim was allowed to go to

the jury, and the jury found liability on this ground.

Although counsel for Great Coastal stated during clos-

ing argument that it had shown actual damages proxi-

mately resulting from the unlawful secondary boycott

activities amounting to $942,065, the jury returned a

verdict of $1,300,000. On the union’s motion for judg-

ment notwithstanding the verdict, the district court con-

cluded that the damage award. . . was substantially

out of touch with damages allegedly proven.” 350 F.

Supp. 1377, 1938 E.D. Va. 1972). The excessive verdict,

in the court’s opinion, suggested that:

The jury, while well intentioned, was in spite of the

Court’s instructions to the contra influenced in its

consideration of damages by the gross and vicious

conduct attributed to the members of the local union

and their sympathizers.

Id. The court denied the motion for JNOV as to the

remaining issues raised by the union, but directed a re-

trial on damages alone. The second jury reached a ver-

dict of $806,093 and judgment was entered on the secon-

dary boycott claim in that amount.

On appeal to this court, IBT argued that the district

court erred in submitting to the jury the question whether

the local union and its members were agents of the In-

ternational; that the company had failed to demonstrate

what part of its losses were caused by iliegal activity as

distinguished from legal activity; that the court erred

in restricting the new trial to damages; and that the in-

structions to the second jury were inconsistent and im-

proper. This court affirmed on all issues. Great Coastal

Express, supra, 511 F.2d at 841. With respect to the

partial new trial issue, the opinion of the court observed

that “the union does not contest the fact that there was

evidence from which a jury could find an illegal secon-

dary boycott,” id. at 842, and further, “it goes without

6a

saying that the jury had abundant evidence” to find that

IBT had committed unlawful secondary boycotting. Id.

at 844. We concluded there was no basis for believing

that the evidence of violence had so inflamed the jury as

to fatally infect the liability verdict with prejudice, par-

ticularly in light of the district court instructions, and

that IBT had not overcome the presumption of validity

of a verdict. Id. at 847. Certiorari was denied by the

Supreme Court and the union paid Great Coastal a total

of $961,653.67, representing the judgment plus interest

and costs.

In February of 1977, counsel for IBT first received

information that the company had deliberately sabotaged

its own equipment on at least one occasion, and had com-

mited other acts of violence in the evident expectation

that responsibility for these acts could be laid on the

union. Counsel investigated these matters between March

and December 1977 and turned over the results of their

investigation to he Justice Department. The Depart-

ment’s response ... August 1978 was that the applicable

statute of limitations precluded any criminal action with

respect to the allegations. The Department made a sim-

ilar response to an inquiry by the district court in No-

vember 1979.

IBT filed its motion to set aside the judgment in the

district court on December 14, 1978. The court allowed

post-judgment discovery and held a two-day evidentiary

hearing. At the hearing, two of the company’s witnesses

from the 1972 triai admitted that part or all of their

testimony had been false, and other evidence of fraudu-

lent company practices was introduced. Stressing that

the allegations of fraud on the court all were instances of

either perjury or fabricated evidence, the district court

considered it unnecessary to address the evidence in

greater detail but denied relief as a matter of law. The

court’s decision may be briefly summarized as follows:

relief under Federal Rule of Civil Procedure 60(b) (3)

7a

would be forthcoming except that the union had not filed

its motion within the Rule's one- year time limitation, and

this limitation could not be evaded through use of 60 (b

(6); perjury and fabricated evidence do not rise to the

level of fraud on the court under the savings provisions

of Rule 60(b), and that IBT had not shown attorney in-

volvement in the fraud; and similarly that perjury and

fabricated evidence were “intrinsic” rather than “extrin-

sic” forms of fraud and would not support an independent

action in equity for relief from a judgment. Great

Coastal Express v. International Brotherhood of Team-

sters, 86 F.R.D. 131, 136-40 (E.D. Va. 1980). This is

the principal decision appealed from.

The case was briefed and argued before this panel at

the November 1980 sitting. We remanded with directions

that the district court supplement the record with specific

findings of fact based upon the evidentiary hearing that

had been held. The district court provided these findings

by memorandum dated August 27, 1981, and we allowed

supplemental! briefing and further oral argument.

B. The District Court’s Findings of Perjury and

Fabricated Evidence.*

The district court found that in October of 1970 during

the strike Robert Seward, an employee of Great Coastal,

was ordered by Terminal Manager William Funai to get

a brick or rock, take a company truck out on the road

and “tear it up some.” Seward drove the company truck

to Route 33 past New Kent, Virginia, broke the wind-

shield of the truck with a brick, and fired three shots

into the front of the trailer with a small caliber hand

gun. Seward thereafter executed several false affidavits

describing this incident, concealing the true events and

claiming “unidentified persons” had sabotaged the truck.

2 While we note Great Coastal’s objections to various findings

made by the district court, the record is clear and essentially

undisputed on the matters relevant to the disposition of the case.

8a

One of these affidavits was incorporated into Great Coast-

al’s answers to interrogatories as “direct evidence of

specific instances of violence, intimidation and secondary

hoveotting activity.” Evidence was also adduced that

Funai sent Seward and other company employees to the

yards of competing companies that had hired some of the

striking Great Coastal drivers, and sabotaged trucks in

those yards.

After the strike, and after Local 592 had been decerti-

fied as representative of the company’s employees as the

result of an election, Seward received a $500 payment

from C. E. Estes, president of the company. Estee told

Seward to keep the payment to himself and to consider it

a “Christmas bonus or pay for a job well done.” The $500

is not reflected anywhere on the company’s books and rec-

ords. Funai also received a payment, a share of the IBT

judgment, of approximately $12,000. This payment was

ostensibly part of the company’s profit-sharing plan;

however, Funai was not employed by the company at the

time of the recovery of the IBT j;adgment, and therefore

payment of this share to Funai was contrary to company

policy regarding profit-sharing.

The district court found that Seward had falsely testi-

fied in the 1972 trial, as to the New Kent incident and

the company’s role in fabricating acts of violence, and

also that Funai failed to tell the complete truth in viola-

tion of his oath as a witness in that trial. The court con-

cluded as follows:

The Court is satisfied and finds as a fact that

much of the testimony offered by the plaintiff in the

first trial dealing with the alleged acts of violence by

the defendant were perjured.

Just as the perjurors are, regrettably, free from

prosecution for perjury by virtue of the statute of

limitations, the one year limitation precludes the in-

stant defendant from relief under Rule 60(b) (3) for

9a

the reasons stated in the Court’s memorandum of

February 29, 1980.

II. Discussion

At the outset, Great Coastal urges that the fraud un-

covered by the union, inasmuch as it relates to acts of

violence, became immaterial once the violence claim was

eliminated by directed verdict. The judgment under at-

tack, the company continues, is a secondary boycott judg-

ment that this court has already affirmed in no uncertain

terms. We note that this argument is, in effect, that any

fraud in the case was harmless error, and that strictly

speaking discussion of such a question should be preceded

by the threshold determination of whether error has oc-

curred at all (or, in this case, whether the fraud is the

type justifying relief from judgment). Nevertheless, we

will briefly consider the company’s argument here because

the parties have given it some priority and it is the

principal point stressed in all of the company’s submis-

sions to this court.

The position of IBT is that once fraud enters the case

in any manner, the judgment must be vitiated without

further inquiry as to the materiality or effect of the

fraud on the judgment, citing Hazel-Atlas Glass Co. v.

Hartford Empire Co., 322 U.S. 238 (1944). In Hazel-

Atlas, the successful litigant had used an article in a

trade publication in support of a patent application, and

subsequently defended the patent in the federal courts.

However, in its zeal to assure the success of the patent,

company officials had fraudulently attributed the author-

ship of the article to a nationally known, supposedly im-

partial figure when in reality the article was authored

by a company patent attorney. The Supreme Court noted

that whatever influence the article may or may not have

had on the patent office and the courts, the company

clearly thought it was material and went to some trouble

to procure it. The IBT particularly relies on the follow-

10a

ing language: “[{Tjhey urged the article upon the Cir-

cuit Court and prevailed. They are in no position now to

dispute its effectiveness.” 322 U.S. at 247.

No doubt in cases like Hazel-Atlas, where a single

cause of action is involved, the IBT’s position has merit.

A case such as ours, where separate and independent

causes of action were alleged, is in that respect somewhat

different and we do not believe Hazel-Atlas provides a

complete answer. We might be receptive to the company’s

position that the secondary boycctt judgment was insu-

lated from the fraud if in fact the violence claim was

effectively and entirely eliminated from the jury’s con-

sideration. In such a case, materiality may well be a

proper inquiry. Cf. Alberta Gas Chemicals, Ltd. v. Cel-

anese Corp., 650 F.2d 9, 12 (2d Cir. 1981); Wilkin v.

Sunbeam Corp., 466 F.2d 714, 717 (10th Cir. 1972),

cert. denied, 409 U.S. 1126 (1973) ; Mas v. Coca Cola, 163

F.2d 505, 508 (4th Cir, 1947).

We cannot say with complete confidence, however, that

the fraud was harmlessly excised from the case. This is

primarily because of the following factual considerations.

First, at the close of the first trial in 1972 the district

court did instruct the jury that they were not to con-

sider the evidence of acts of violence in reference to any

damages from secondary boycotting, and that the jury

should only concern itself with the second boycott claim.

However, near the close of his instructions the district

court also stated:

Don’t get off on those despicable acts that were

testified to. We are not involved with that anymore

with reference to the issue right before you except as

a totality of circumstances which may or may not

have any bearing on it.

Thus, there is the possibility that the perjury and fabri-

cated evidence at issue may have been considered by the

jury as part of the “totality of circumstances.” As we

lla

have noted above, in the course of ordering a partial new

trial, the district court acknowledged that the jury may

have been improperly influenced by the evidence of acts

of violence.

Secondly, the company’s brief to this court on its prior

appeal contained repeated references to the evidence of

violence, with specific reference to the New Kent incident

and sabotage of equipment. The company argued:

The Union’s efforts to persuade non-striking employ-

ees to stop work were not restricted to peaceful

means. Again and again, during the long period of

the strike, resort was had to extreme violence.

It would have been permissible for the jury to find,

upon these facts, that the Union drew upon the force

of the violent acts for its benefit. In combination

with the other illegal hot cargo and secondary boy-

cott activity, which was inextricably tied in with

the violence, the company’s business was brought to

a total standstill.

Such argumentation falls directly within the prescription

of Hazel-Atlas quoted above, see also 322 U.S. at 241, and

we are precluded from inquiring as to the materiality or

effect on this court’s decision.

A. Relief from Judgments Under Rule 60(b).

Respect for the finality of judgments is deeply en-

grained in our legal system. As Justice Story observed,

„lil is for the public interest and policy to make an end

to litigation . . .” so that “suits may not be immortal,

while men are mortal.” Ocean Ins. Co. v. Fields, 18 F.

Cas. 532, 539 (C.C.D. Mass. 1841) (Story, J. sitting as

Cireuit Judge). See also Southern Pacific RR Co. v.

United States, 168 U.S. 1, 49 (1897). Equally compelling

circumstances may arise, however, in which parties are

entitled to be relieved of an unjust judgment arrived at

through mistake, ignorance, inadvertence or misconduct.

12a

See, e.g., Publicker v. Shalleross, 106 F.2d 949, 952 (3d

Cir. 1939), cert. denied, 308 U.S. 624 (1940) (“We be-

lieve truth is more important than the trouble it takes to

get it.”)

Federal Rule of Civil Procedure 60 provides the terms

on which these two principles are balanced. Rule 60(b)

(3) allows a court to relieve a party from final judgment

on the grounds of “fraud (whether heretofore denomi-

nated intrinsic or extrinsic), misrepresentation, or other

misconduct of an adverse party.” A motion under 60(b)

(3), however, must be made within one year after the

judgment was entered. Thus, the Rule suggests that

equitable considerations prevail in such cases for one

year, and that the interest in finality of judgments pre-

vails thereafter.

We are in complete accord with the conclusions of the

district court that 60(b) (3) would have provided relief

in this case had the union’s motion been timely, and also

that 60(b)(6) (“any other reason justifying relief“)

cannot be used to circumvent the one-year limitation for

grounds specified previously in the rule. 86 F.R.D. at

136-37. See also Kerwit Medical Products, Inc., w. N & H

Instruments, Inc., 616 F.2d 833, 836-37 n.8 (5th Cir.

1980). We therefore turn to the savings provisions in

Rule 60(b).

B. “Fraud on the Court”

IBT has continuously asserted that it seeks relief from

fraud on the court under Hazel-Atlas Glass Co. v. Hart-

ford-Empire Co., 322 U.S. 238 (1944). Rule 60(b) spe-

cifically provides that “this rule does not limit the power

of a court to... set aside a judgment for fraud upon the

court,” and the 1946 Notes of the Advisory Committee

cites Hazel-Atlas “as an illustration of this situation.”

The Supreme Court’s opinion in Hazel-Atlas reveals the

following facts. Hartford-Empire Company had sought

13a

a patent for a device that manufactured glass by a process

known as “gob-feeding.” Faced with “apparently insur-

mountable Patent Office opposition,” Hartford officials de-

vised a scheme for the deliberate purpose of deceiving the

hostile Patent Office into awarding them a patent. The

scheme was to have a Hartford patent attorney prepare

an article praising the process and then procure the sig-

nature of an ostensibly disinterested and respected

pseudo-author. This plan was carried out and, with the

article included in the application, a patent was granted.

Shortly thereafter Hartford brought suit in a federal dis-

trict court charging Hazel-Atlas with infringing the

patent. Although the article was part of the voluminous

record, the district court dismissed the suit without ref-

erence to the article on the ground that no infringement

was proved. On appeal, however, Hartford directed the

court’s attention to the article and the court of appeals

reversed, quoting the article at some length.

Hazel-Atlas had received preliminary information dur-

ing the litigation that the authorship of the article was

fraudulent. Following the court of appeals decision, in-

vestigation began in earnest. Although investigators for

Hazel-Atlas reported little success from their discussions

with the ostensible author, Hartford representatives who

had been in clandestine contact with him reported “very

successful results,” specifically that the “author” was co-

operative and would be of great assistance. In the weeks

that foliowed, Hartford paid the author $8000, explaining

the payments as a “moral obligation” of the company al-

though there was no prior agreement between the parties

that the individual would be compensated.

Hazel-Atlas eventually brought suit only after the facts

were fully disclosed in a separate lawsuit. The court of

appeals denied relief on the grounds that the fraud was

not newly discovered, that the article was not a primary

basis of its earlier decision, and that it lacked the power

to set aside a decree after the expiration of the court

14a

term in which the decree was rendered. The Supreme

Court reversed.

The pertinent parts of the Supreme Court’s analysis

are as follows: The Court first reasserted the historical

equity power of courts to set aside judgments, the enforce-

ment of which would be manifestly unconscionable. The

Court characterized the fraud as a “deliberately planned

and carefully executed scheme to defraud not only the

Patent Office but the Circuit Court of Appeals.” 322 U.S.

at 245-46. Furthermore, the litigation involved did not

merely concern the private parties but also “issues of

great public moment” associated with the legal monopoly

afforded by a patent. Id. at 246. The court concluded

that the “term rule” was not a bar to equitable relief in

such circumstances and directed that the original judg-

ment be set aside. Id. at 248-51.

IBT urges that this case presents all the critical ele-

ments of fraud in the Hazel-Atlas case: specifically, that

the fabricated testimony here was intended to “help

along” the company’s damage suit, just as Hartford used

the article to help along its patent application; and that

both Hartford and Great Coastal tried to buy the silence

of the conspirators. The analogy is indeed close in some

respects, however we must ultimately reject it.

The federal courts that have struggled with the defini-

tion of “fraud on the court” in the context of Rule 60 (b

have found such a definition elusive, see, e. g., Toscano v.

Commissioner, 441 F.2d 930, 933-34 (9th Cir. 1971), but

have generally agreed that the concept should be construed

very narrowly, see, e. g., Kerwit Medical Products, Inc., v.

N & H Instruments, Inc., 616 F.2d 833, 836-37 (5th Cir.

1980); Senate Realty Corp. v. Commissioner, 511 F.2d

929, 931, 932-33 (2d Cir. 1975). The principal concern

motivating narrow construction is that the otherwise

nebulous concept of “fraud on the court” could easily

overwhelm the specific provision of 60(b)(3) and its

time limitation and thereby subvert the balance of equi-

15a

ties contained in the Rule. See Kupferman v. Consoli-

dated Research & Manufacturing Corp., 459 F.2d 1072,

1078 (2d Cir. 1972); 7 Moore’s Federal Practice § 60.33

et 511 (1971). Not all fraud is “fraud on the court.” 11

Wright & Miller, Federal Practice and Procedure § 2870

at 253 (1973). Thus “fraud on the court” is typically

confined to the most egregious cases, such as bribery of

a judge or juror, or improper influence exerted on the

court by an attorney, in which the integrity of the court

and its ability to function impartially is directly im-

pinged. See Addington v. Farmers Elevator Mutual Ins.

Co., 650 F.2d 663, 668 (5th Cir.), cert. denied, —— U.S.

— (1981); Lockwood v. Bowles, 46 F.R.D. 625, 630

(D.D.C. 1969). Professor Moore’s suggested formulation

is often cited, although the Toscano court observed that

it still leaves many aspects of the issue unresolved:

“Fraud upon the court” should, we believe, embrace

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 adju-

dication. Fraud inter partes, without more, should

not be a fraud upon the court, but redress should be

left to a motion under 60(b)(3) or to the inde-

pendent action.

7 Moore’s Federal Practice § 60.33 at 515 (1971); see

also Martina Theater Corp. v. Schine Chain Theaters, 278

F.2d 798 (2d Cir. 1960) (following Moore).

In this light we cannot say that the fraud in this case

presents a deliberate scheme to directly subvert the ju-

dicial process, sufficient to constitute fraud on the court.

It is also apparent that the fraud here primarily concerns

the two parties involved and does not threaten the public

16a

injury that a fraudulently- obtained legal monopoly did in

Hazel-Atlas. Cf. Comment, 60 Cal. L. Rev. 531, 557 (1972).

Despite the confusion inherent in this doctrine, we are

not totally without guideposts. We concur in the ap-

praisal of the district court that the fraud here consists

of perjury and fabricated evidence. Early in the Court’s

analysis in Hazel-Atlas, the Court commented, “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.” 322

U.S. at 245. Motivated at least in part by this language,

* courts confronting the issue have consistently held that

perjury or fabricated evidence are not grounds for relief

as “fraud on the court.” See, e.g., Pfizer, Inc., v. Inter-

national Rectifier Corp., 538 F.2d 180, 193-95 (8th Cir.

1976), cert. denied, 429 U.S. 1040 (1977); Serzysko v.

Chase Manhattan Bank, 461 F.2d 699, 702 (2d Cir.),

cert. denied, 409 U.S. 883 (1972); Porcelli „. Joseph

Schlitz Brewing Co., 78 F. R. D. 499 (E.D. Wisc.), aff'd

without opinion, 588 F.2d 838 (7th Cir. 1978) ; Konings-

berg v. Security National Bank, 66 F.R.D. 439, 442 (S. D.

N.Y. 1975); Lockwood v. Bowles, 46 F.R.D. 625, 630

(D.D.C. 1969). See also RESTATEMENT OF JUDGMENTS

126 (2) (b). This conclusion is consistent with the gen-

eral definitional principles just described. Perjury and

fabricated evidence are evils that can and should be ex-

posed at trial, and the legal system encourages and ex-

pects litigants to root them out as early as possible. In

addition, the legal system contains other sanctions against

perjury. See Lockwood v. Bowles, 46 F. R. D. 625 (D. D.C.

1969) ; Shammas v. Shammas, 9 N. J. 321, 88 A. 2d 204

(1952) (Brennan, J.). Fraud on the court is therefore

limited to the more egregious forms of subversion of the

legal process already suggested, those that we cannot

necessarily expect to be exposed by the normal adversary

process.

17

IBT also takes exception to the district court’s conclu-

sion that fraud on the court requires involvement by at-

torneys. Involvement of an attorney, as an officer of the

court, in a scheme to suborn perjury would certainly be

considered fraud on the court. IBT points out, however,

that the record in Hazel-Atlas indicates that the company

“attorney” who prepared the article with the intent that

it be signed by another was in fact a “patent attorney,”

a title given at least at that time to any registered patent

agent, and that he had not attended law school and was

not the member of any bar. Other circuits have also

recognized that fraud on the court can occur without the

involvement of attorneys. See Toscano v. Commissioner,

441 F.2d 930, 933-34 (9th Cir. 1971); Lim Kwock Soon

v. Brownell, 369 F.2d 808 (5th Cir. 1966). However, in

view of our holding that the type of fraud in this case

does not rise to the level of fraud on the court, we need

not consider the question of attorney involvement.

We therefore conclude that the company’s actions, how-

ever reprehensible, are not tantamount to fraud on the

court.*

IBT argues that the acts of violence directly affected the damage

calculation in the second trial as well, because Great Coastal’s

President repeatedly mentioned the effect of violence on the com-

pany and the company’s damage study implicitly includes costs

incurred by violence. As the preceding discussion indicates, we do

not feel that Great Coastal has perpetrated a fraud on the court.

Nevertheless the union’s argument also suggests that the damage

award may be factually incorrect because the union is not respon-

sible for any loss of profit caused by the expense of remedying

company-inflicted damage. This method of attack must also be

rejected. The jury was carefully instructed that the only damages

recoverable were those proximately caused by illegal secondary

boycott activity. We have slready observed, in the prior decision

of this court quoted above, that there was abundant evidence of

damage caused by the second boycotting alone. The jury’s verdict

18a

C. Independent Action in Equity.

While the IBT initially proceeded under the theory of

fraud on the court under Hazel-Atlas and not under the

second savings provision of Rule 60 b), the independent

action in equity, the district court nevertheless considered

and rejected the applicability of this doctrine and IBT

has addressed the issue in its briefs. The district court

followed the intrinsic/extrinsic fraud distinction described

in United States v. Throckmorton, 98 U.S. 61 (1878).

Under this doctrine, fraud must be “extrinsic” to justify

relief, that is, fraud that actually prevented an issue

from being joined or a party from making a valid claim

or defense. See Bizzell v. Hemingway, 548 F.2d 505

(4th Cir. 1977) (collusion between plaintiff’s attorney

and opposing party). Notwithstanding the considerable

criticism leveled against the intrinsic/extrinsic distinc-

tion, see, e.g., 11 Wright & Miller, Federal Practice and

Procedure § 2868 at 240 (1973), and the devate regard-

ing the effect of Marshall v. Holmes, 141 U.S. 589 (1891),

on the question, it is clear that perjury and false testi-

mony are not grounds for relief in an independent ac-

tion in the Fourth Circuit for many of the same reasons

that apply to fraud on the court. See Durham v. New

Amsterdam Casualty Co., 208 F.2d 342, 345 (4th Cir.

1953) ; Aetna Casualty & Surety Co. v. Abbott, 130 F.2d

40, 43-44 (4th Cir. 1942); Chrysler Corp. v. Superior

Dodge, Inc., 83 F.R.D. 179, 186 (D.Md. 1979) ; Prickett

v. Duke Power Co., 49 F.R.D. 116, 118 (D.S.C. 1970).

was less than the company’s study projected. When the jury is

properly instructed and its verdict is supported by substantial evi-

dence, as we observed in 1975 in this case, our inquiry is ended

and we cannot speculate how the particular figure was decided.

Nunez v. Superior Oil Co., 572 F.2d 1119, 1124 n.6 (5th Cir. 1978);

Burger Chef Systems, Inc., v. Melfred Co., 547 F.2d 786, 791 (4th

Cir. 1976).

19a

Referring, apparently, to the extrinsic/intrinsic distine-

tion, IBT argues that the independent action doctrine

requires only that the fraud, if disclosed, “would have

made a difference in the way. . . counsel approached

the case or prepared for trial,” citing Rozier v. Ford

Motor Co., 573 F.2d 1332, 1339-42 (5th Cir. 1978). Un-

der such a formula, the union claims if it had known the

truth in this case it would have thoroughly impeached the

company’s witnesses. We believe the more complete in-

quiry is described in Addington v. Farmers Elevator Mu-

tual Ins. Co., 650 F.2d 663, 667-68 (5th Cir.), cert.

denied, —— U.S. —— (1981):

(1) a judgment which ought not, in equity and good

conscience, to be enforced; (2) a good defense to the

alleged cause of action on which the judgment is

founded; (3) fraud, accident, or mistake which pre-

vented the defendant in the judgment from obtain-

ing the benefit of his defense; (4) the absence of

fault or negligence on the part of defendant; and

(5) the absence of any adequate remedy at law.

(cites omitted). The particular element that is lacking

in this case is a good defense to the action that the IBT

was prevented from discovering or asserting because of

the fraud. Both parties recognize that the judgment un-

der attack here is the secondary boycott judgment: the

union has not proffered any defense to liability for sec-

ondary boycotting that it was precluded from asserting

because of the company’s perjury and we frankly can-

not perceive one in light of the comments on the evi-

dence made on the prior appeal, quoted in part supra.

Relief was properly denied on this ground as well.

III. Conclusion

We affirm the district court’s denial of relief in No.

80-1217 and dismiss the petitions in Nos. 73-2393 and

73-2448. The company’s appeal No. 81-2073 is dismissed.

SO ORDERED.

20a

BUTZNER, Circuit Judge, dissenting:

I agree with the district court and part II A of the

majority opinion that the union would be entitled to pre-

vail had it filed its motion to set aside the judgment,

which the company fraudulently obtained, within the one-

year period of limitations prescribed by Rule 60(b). But

I do not agree that the one-year limitation bars relief to

the union. Because the union did not institute proceed-

ings to set aside Great Coastal’s judgment within one year

after its entry, it must show that Great Coastal practiced

fraud upon the court. The rule provides that this type of

fraud is not subject to the one-year limitation.

I dissent from the majority’s conclusion that Great

Coastal’s fraud does not rise to the level of fraud on the

court. The facts satisfy the requirements of fraud on the

court that are set forth in Hazel-Atlas Glass Co. v. Hart-

ford-Empire Co., 322 U.S. 238 (1944). Rule 60(b) was

amended in 1946 to reflect the principles expounded in

Hazel-Atlas, and the Notes of the Advisory Committee

clarify the concept of fraud on the court by citing Hazel-

Atlas as “an illustration of this situation“ which the

amended rule addresses.

I

Pursuant to the directions of this court, the district

court made supplementary findings of fact derived from

the 1979 evidentiary hearing on the union’s motion for

relief from the judgment granted Great Coastal. The dis-

trict court’s findings on remand clearly establish that the

officers and employees of Great Coastal engaged in an ex-

tensive, deliberate scheme to subvert justice by perpe-

trating a fraud on administrative and judicial tribunals.

Because the district court’s findings are essential for the

resolution of this appeal, they are quoted as follows:

At the evidentiary hearing upon the union’s motion

to set aside judgment for alleged fraud upon the

21a

Court, the union presented nine witnesses: (1) Rob-

ert G. Seward, a driver for Great Coastal during

the strike; (2) Betty Seward, Robert Seward's wife;

(3) William P. Funai, Great Coastal’s Terminal

Manager during the strike; (4) William Stagg, Jr.,

Great Coastal’s Assistant Terminal Manager during

the strike; (5) John Martini, a Great Coastal driver

during the strike; (6) Samuel Rogers, a Great

Coastal driver during the strike, presently employed

by Great Coastal; (7) Mack Fifer, a Great Coastal

driver during the strike, presently employed by

Great Coastal; (8) Edmond Christian Nuckols, Jr.,

a Great Coastal employee during the strike; and (9)

Carmello Thomas Tuminello, Supervisor and Dis-

patcher for Adley Express during the strike.

No witnesses were called on behalf of [Great

Coastal].

Charles E. Estes is presently President and owner

of Great Coastal, and held those same positions dur-

ing the strike. During the strike, William P. Funai,

the Terminal Manager of Great Coastal, routinely

reported any damage of Great Coastal equipment to

Estes. Estes personally negotiated the profit-sharing

arrangements between key managerial employees

and Great Coastal. Funai was a key managerial em-

ployee who had direct supervision over the drivers,

with the right to hire and fire drivers. Funai de-

scribed himself as “the boss” of the terminal; a fact

which corroborated the testimony of Seward. The

drivers took their instructions directly from Funai,

and Funai took his instructions directly from Mr.

Estes. Funai was on profit-sharing during the strike,

a status reserved by the company for managerial

personnel. Funai, according to Great Coastal, was en-

titled to 2% of all Great Coastal profits in excess of

$100,000.00 by virtue of his status as a manager; in

fact, he received $12,024.22 as his prorated share

of the IBT judgment.

22a

Edward L. Flinn was manager of Great Coastal

during the strike, and is presently a manager with

the company. As a manager, Flinn, according to

Great Coastal, was on profit-sharing during the

strike, and was entitled to 2% of all of Great

Coastal’s profits in excess of $100,000.00. Flinn re-

ceived $12,731.12 as his prorated share of the IBT

judgment.

Robert Williams was Great Coastal’s maintenance

supervisor and shop foreman during the strike, a

position which he presently holds. Williams was

part of Great Coastal’s management during the strike

and was entitled to 2% of all Great Coastal profits

in excess of $100,000.00. Williams received $12,-

822.69 as his share of the IBT judgment.

One morning during the strike William Stagg,

Assistant Terminal Manager of Great Coastal, was

told by C. E. Estes that he wanted to see Great

Coastal’s Terminal Manager, William Funai. Stagg,

in turn, told Funai, who was at his desk adjacent to

Stagg’s, that Estes wanted to see him. In response

to the message, Funai went directly to the second

floor where Estes’ office was located. In approxi-

mately ten to fifteen minutes, Funai came down the

stairs and immediately told Stagg to get the pickup

truck and go to Belk Floor Covering to relieve

Robert Seward. Stagg had never before been asked

to relieve any drivers during the strike and it was

“very unusual” that the request was made in this in-

stance inasmuch as other drivers were idle and

available. Nevertheless, in accordance with Funai’s

instructions, Stagg got in the company pickup truck,

and drove to Belk Floor Covering.

On that day, October 23, 1970, Robert Seward

was unloading a truck at Belk Floor Covering in the

City of Richmond when he was instructed by Stagg

23a

to go back to the terminal. Seward got in the pickup

truck left by Stagg and went to the terminal while

Stagg finished unloading the trailer at Belk Floor

Covering.

Seward went directly to the terminal office and

reported to his boss, William Funai, who ordered

Seward to get a brick or a rock, to take a truck to

West Point, to break out the windshield of the truck

and to “tear it up some”. Funai and Seward dis-

cussed the fact that Seward was “going to break up

the truck”, was going to “shoot the truck” with a

gun, and that Seward should wear gloves because

“there might be fingerprints”.

As instructed, Seward got a half brick off of the

Great Coastal yard and drove a G eat Coastal truck

to Route 33 off Interstate 64, past New Kent, and

pulled off the road. Seward, wearing gloves in an

effort to avoid fingerprints, threw the brick at the

windshield on the passenger side three times; the

brick bounced off the windshield the first two times,

but on the third blow crashed through its center.

He then fired three shots into the front of the Great

Coastal trailer using a small handgun—a cheap .22

caliber “Saturday Night Special”.

Seward then proceeded on Route 33 to Green’s

Restaurant, called the terminal and spoke with Ed

Flinn, but rather than tell Flinn the truth, Seward

told a contrived story to the effect that unidenti-

fied persons had sabotaged the truck. Thereafter,

the police arrived and Seward took the officer down

the road to a point where a high bank rises from the

highway and then levels off into the woods. Al-

though that was not where Seward in fact had in-

flicted the damage, Seward, in telling his lie to the

police, designated that as the place where a brick

had been thrown at the windshield of his truck,

24a

where he heard gunshots, and where he saw men

running from the bank away from the road through

the woods. Later that same day Stagg and the em-

ployees at the terminal learned that Seward’s tractor

windshield had been knocked out and his trailer had

been “shot up”.

Seward executed a false affidavit concerning the

New Kent incident, identified as IBT Exhibit 3.

That affidavit was witnessed by Edward L. Flinn, and

was specifically incorporated in Great Coastal’s an-

swer to IBT Interrogatory No. 14 as “direct evi-

dence of specific instances of violence, intimida-

tion and secondary boycotting activities which are

recorded in written statements attached hereto”.

Great Coastal’s answers to IBT’s interrogatories

were executed under oath by E. C. Estes, Great

Coastal’s President, and filed with this Court on

March 25, 1971.

Seward gave a false affidavit concerning the New

Kent incident, identified as IBT Exhibit 4, to a

representative of the National Labor Relations

Board. Seward also testified falsely about the New

Kent incident in a proceeding before the National

Labor Relations Board.

Seward was called as a witness for Great Coastal

at the trial before this Court on June 15, 1972.

He falsely testified that he was driving toward New

Kent in October 1970 when a brick came through the

windshield on the passenger side, and that he saw

men running away through the woods. Seward ad-

mitted at the hearing in July, 1979 that he gave

perjured testimony before this Court in 1972.

William P. Funai was called as a witness for

Great Coastal at the trial before this Court on

June 15, 1972 and testified that during the strike

he went to West Point, Virginia to look at a Great

25a

Coastal truck and saw “(t]he front windshield was

broken on it” and there was “a small hole” in the

trailer which looked like it was caused by “a shot,

a small caliber gun”. When asked in 1972 whether he

“saw anybody do anything to that truck”, Funai an-

swered, “I seen the damage . and nothing else“.

Funai now concedes that he failed to “tell the

truth, the whole truth, and nothing but the truth”

in his 1972 testimony; he admits that he failed to

tell everything he knew about the New Kent incident

to the Court and he therefore violated his sworn

oath before this Court. When Funai asked whether he

told Seward to sabotage his equipment, Funai re-

fused to answer “on the grounds that the answer may

tend to incriminate me“.

The Court’s conciusion as to Seward’s having

testified falsely at the first trial is made inde-

pendent of Funai’s exercise of his right against self-

incrimination.

Edward Flinn is presently manager at Great

Coastal and was also manager at the company dur-

ing the strike. Some time in 1978 Robert Seward

spoke with Ed Flinn at the Great Coastal terminal

and told Flinn the truth about the New Kent incident.

Flinn stated to Seward that at one time he, Flinn,

was trying to trace down the New Kent incident, but

someone told Flinn to “lay off” because he was “get-

ting close to something in his investigation”. The

Court’s finding in this regard is admittedly prompted

by the absence of any testimonial denial] on the part

of [Great Coastal].

When Local 592 struck Great Coastal in 1970,

Adley Express, a trucking company in the Richmond

area, enjoyed a greater demand for its services and

begen hiring extra roadmen who were out on strike

against Great Coastal. After the strike began, Ed

Flinn, manager of Great Coastal, placed a telephone

26a

call to Carmello Thomas Tuminello, dispatcher at

Adley. Flinn wanted to know who was in charge at

the time, and Tuminello responded that he was.

Flinn said, I'd like to see if you could do us a

favor” and asked if Adley was “running any extra

road drivers that are out on strike that work at

Great Coastal”. When Tuminello responded that Ad-

ley wes running six or seven of them every night,

Flinn asked if Adley “could stop running the road-

men on the road, so we could starve the sons of

bitches out and make them come back to work at

Great Coastal”. Flinn went on to say that this would

help Great Coastal “get rid of the union”. Tumi-

nello told Flinn that his boss, the terminal manager,

who was not there at that moment, said the men

were qualified drivers, Adley needed extra men, and

he would continue to run them until he had further

notice from his own boss.

During the strike Seward was ordered by Funai

to go to Adley and East Coast to “punch tires and

tear up trucks” [Tr. 40,95(Seward)]. Funai handed

three “punches” to Seward that were prepared in

Great Coastal’s maintenance shop and sent him to a

motel in Richmond to wait for the other members of

the “raiding” party.

That night Seward was met at the motel by three

other Great Coastal employees, Sam Rogers, Mack

Fifer and Chris Nuckols, and together, upon orders

from Funai, they went on a “raid” to Adley, driving

to Adley in Nuckols’ car. Seward, Rogers and

Nuckols punctured tires while Fifer slashed the air

hoses off the Adley trucks. Tuminello spotted the

four marauders under the Adley trucks while making

a yard check, but by the time he returned with

assistance, all he found were punctured tires and

slashed air lines on the Adley equipment. Tuminello

noted that one was wearing a Great Coastal jacket

27a

and later recalled the identity of one of them as

“Seward”.

Thereafter, similar acts of vandalism were con-

ducted by Seward and Nuckols at the East Coast

Freight yard. Seward was corroborated in regard to

these acts by several witnesses.

During the strike Funai asked Seward to shoot

the windows out of the Great Coastal office with an

old double barrel shotgun. Seward declined because

there were pickets nearby and the police were also

in the vicinity.

Also during the strike, Funai instructed Seward

and Chris Nuckols te purchase a slingshot for the

purpose of breaking truck windshields. The tes-

timony of Seward in this regard is corroborated by

Nuckols. Seward and Nuckols purchased a slingshot

from a sporting goods store, and Seward was with

Funai, the Terminal Manager, when Funai submitted

a ticket to Great Coastal petty cash for reimburse-

ment of the slingshot. Seward and Nuckols tried to

use the slingshot in the Great Coastal yard to break

the windshield of Great Coastal trucks, but their

efforts were to no avail because the shot could not

be propelled with sufficient force to damage the

windshield glass.

During the strike Martini heard Estes and Flinn

express their appreciation to the drivers for their

“irritation and agitation” of the pickets. Martini

also heard Estes and other officers of Great Coastal

express appreciation when Great Coastal trucks

would come in damaged. In response to an inquiry

from the Court on the attitude of Great Coastal

managers about damage to the trucks, Martini testi-

fied that when damaged equipment came into the

terminal, these officials would say words to the ef-

fect that, “this is what we need”.

28a

On November 24, 1971, as a result of an election,

the National Labor Relations Board decertified Lo-

cal 592 as representative of Great Coastal employees.

Seward had, at the request of a Great Coastal man-

ager, been active in seeking the decertification of

the union.

Within three weeks of Great Coastal’s elimination

of the union, Estes called Seward into his office and

handed Seward $500.00 in cash. At that time, Estes

said to Seward, “keep it to [your]self”, and told

Seward he could “call it a Christmas bonus or pay

for a job well done”. This $500.00 payment is no

where reflected on the company’s books and records.

Certain of the company’s records for the relevant

time period have been destroyed, but Great Coastal’s

custodian of records has no recollection of the cir-

cumstances underlying the destruction of those

documents.

Emmett Williamson, Great Coastal’s Treasurer

and General Manager, testified that during the strike

each “managerial” employee who was on profit-

sharing with Great Coastal was “reassured by the

company that he would receive his agreed percentage

of profits if the company were later to recover dam-

ages from the union”.

Notwithstanding the company policy that a man-

ager on profit-sharing must have been with Great

Coastal at the time of recovery against the IBT,

William P. Funai, in July 1976—more than five

years after Funai had left the employ of Great

Coastal—received $12,024.22 ($8,927.99 net after-

tax dollars) as his share of Great Coastal’s recov-

ery against the IBT.

The Court is satisfied and finds as a fact that

much of the testimony offered by the plaintiff in the

first trial dealing with the alleged acts of violence

by the defendant was perjured.

29a

Just as the perjurors are, regrettably, free from

prosecution for perjury by virtue of the statute of

limitations, the one year limitations precludes the

instant defendant from relief under Rule 60(b) (3)

for the reasons stated in the Court’s memorandum

of February 29, 1980.

To the district court’s findings I need add only that Great

Coastal persisted in its fraud when this court heard the

union’s appeal from the judgment awarding the company

damages for the secondary boycott. Contrary to its

present position, Great Coastal asserted in its brief that

the secondary boycott activity “was inextricably tied in

with violence .. . Great Coastal, however, did not re-

veal that this violence was self-inflicted. Instead, its brief

relied on the perjured testimony of Seward and its other

witnesses, and it embellished the appellate record with

photographs of the truck that Seward, acting on orders of

company officials, had damaged with a brick and bullets.

II

It may be well to dispel at the outset the notion that

proot of bribery of a judge or juror or of fraud perpe-

trated by other officers of the court is an essential ele-

ment of fraud on a court. To be sure, this wrongdoing

would be a badge of such fraud, but the opinion in Hazel-

Atlas did not rely on this type of misconduct. Commenta-

tors have suggested that involvement of an attorney is

an essential component of fraud on the court when mis-

conduct of other officers of the court is not established.*

The Supreme Court, however, neither predicated its de-

cision in Hazel-Atlas on the narrow ground of an attor-

ney’s involvement in the litigant’s fraud, nor did it iden-

The district court’s memorandum of February 29, 1980, is

reported as Great Coastal Express v. International Brotherhood

of Teamsters, 86 F.R.D. 131 (E.D. Va. 1980).

2 See 7 Moore’s Federal Practice JJ 60.33 at 513-15; 11 Wright &

Miller, Federal Practice & Procedure § 2870 at 256.

30a

tify this as an element of fraud on the court. Conse-

quently, a civil judgment may be set aside because of a

litigant’s fraud on the court though no wrongdoing is

ascribed to an attorney or other officer of the court.

Toscano v. Commissioner, 441 F.2d 930 (9th Cir. 1971);

Lim Kwock Soon v. Brownell, 369 F.2d 808 (5th Cir.

1966); Dausuel v. Dausuel, 195 F.2d 774 (D.C. Cir.

1952).

Parenthetically, I note that if proof of fraud by an at-

torney is required, Great Coastal can retain its fraud-

ulently obtained judgment. Great Coastal’s attorneys did

not participate in this fraud, and the union does not

charge that they did. The sole perpetrators of the fraud

were the company’s officers and employees who, along with

the company, have profitted handsomely from the judg-

ment.

Also, it may be well to put aside the notion that all

fraud that injures an opponent must be brought to the

attention of the court within one year of the entry of

judgment when bribery of the court or other such egre-

gious misconduct is not alleged. In Hazel-Atlas, the de-

frauded litigant was mulcted of one million dollars, and

the judgment had been entered eight years before it was

challenged. The Court acknowledged that “in most in-

stances society is best served by putting an end to litiga-

tion after a case has been tried and judgment entered.”

322 U.S. at 244. But there are exceptions to this general

rule. Notwithstanding the eight-year delay, the opinion

affirmed the power of federal courts to set aside a fraudu-

lent judgment, saying: “But where the occasion has de-

manded, where enforcement of the judgment is ‘mani-

festly unconscionable,’ they have wielded the power with-

out hesitation.” 322 U.S. at 244-45 (citations omitted)

In Hazel-Atlas, the occasion demanding relief was, as

here, a judgment obtained by fabricated evidence. There

it was a spurious publication to sustain a litigant’s claim

to a patent both at proceedings in the patent office and in

31a

court. The enormity of this long concealed fraud elicited

from the Court both condemnation and the proper re-

sponse of the judiciary. The Court said: 322 U.S. at 246

Furthermore, tampering with the administration of

justice in the manner indisputably shown here in-

volves far more than an injury to a single litigant.

It is a wrong against the institutions set up to pro-

tect and safeguard the public, institutions in which

fraud cannot complacently be tolerated consistently

with the good order of society. Surely it cannot be

that preservation of the integrity of the judicial

process must always wait upon the diligence of liti-

gants. The public welfare demands that the agencies

of public justice be not so impotent that they must

always be mute and helpless victims of deception and

fraud. 322 U.S. at 246

III

Hazel-Atlas explains that a court’s power to grant

equitable relief against a fraudulent judgment is not a

creature of statute; nor, I might add, is it a creature of

Rule 60(b). The Court stated:

It is a judicially devised remedy fashioned to re-

lieve hardships which, from time to time, arise from

a hard and fast adherence to another court-made

rule, the general rule that judgments should not be

disturbed after the term of their entry has expired.

Created to avert the evils of archaic rigidity, this

equitable procedure has always been characterized

by flexibility which enables it to meet new situations

which demand equitable intervention, and to accord

all the relief necessary to correct the particular in-

justices involved in these situations. 322 U.S. at 248

Hazel-Atlas requires proof of two elements to establish

fraud on the court for the purpose of setting aside a civil

judgment when the court itself has not been compromised

by bribery or corruption. These two elements distinguish

fraud on the court from the type of fraud that Rule 60(b)

requires to be asserted within one year. The first is that

the judgment involves an issue “of great moment to the

public... . 322 U.S. at 246. A dispute that concerns

only private litigants is not enough. See S & E Con-

tractors, Inc., v. United States, 406 U.S. 1, 15 (1972)

(dictum).

Hazel-Atlas dealt with an affront to the public’s interest

in the integrity of the nation’s patent laws. This case

involves an assault on the public’s interest in the in-

tegrity of the laws governing our national labor policy.

There can be no doubt that the dispute between the com-

pany and the union implicated interests beyond those of

the litigants. Section 1 of the Labor Management Rela-

tions Act, 1947, 29 U.S.C. § 141, states in part:

It is the purpose and policy of this chapter, in

order to promote the full flow of commerce. to

define and proscribe practices on the part of labor

and management which affect commerce and are in-

imical to the general welfare, and to protect the

rights of the public in connection with labor disputes

affecting commerce.

Just as a litigant in Hazel-Atlas deceived the patent of-

fice by fabricated evidence, Great Coastal deceived the

National Labor Relations Board in administrative pro-

ceedings pertaining to the same strike that is the sub-

ject of this case by fabricating evidence of union violence.

Just as a litigant in Hazel-Atlas invoked in judicial pro-

ceedings the patent laws that are designed both to grant

a monopoly and advance the public interest, Great Coastal

invoked the Labor Management Relations Act, particu-

larly 29 U.S.C. §§ 158(b) (4), 185, and 187. As the con-

gressional declaration of purpose and policy states, 29

U.S.C. § 141, these laws, too, are designed to protect the

public as well as litigants.

I therefore conclude that the litigation culminating in

the judgment for Great Coastal satisfied the first re-

quirement of Hazel-Atlas. This litigation involved more

than a controversy between private parties, and the fraud

by which it was prosecuted debased the laws enacted to

assure the free flow of commerce for the benefit of the

public.

IV

The second requirement of Hazel-Atlas is best described

in the words of the Court, 322 U.S. at 245-46:

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. Here . . we find a deliberately

planned and carefuliy executed scheme to defraud not

only the Patent Office but the Circuit Court of

Appeals.

The unrefuted evidence of the 1979 hearing conducted

by the district court and the court’s supplementary find-

ings establish beyond doubt that Great Coastal, its of-

ficers, and employees engaged in “a deliberately planned

and carefully executed scheme to defraud” the National

Labor Relations Board, the district court, and the court

of appeals. Their fraud was no isolated instance of per-

jury. To achieve their purposes, the officers and employees

created spurious evidence, deceived the Virginia State

Police, answered interrogatories under oath untruthfully,

filed false affidavits and gave perjured testimony in ad-

ministrative and judicial proceedings, introduced fabri-

cated exhibits, and filed a corrupt brief and appendix on

appeal.

By payments and promises of payments, Great Coastal

frustrated discovery of its fraud through the judicial

processes afforded by the Rules of Civil Procedure. More-

over, its scheme did not end with the entry of judgment.

Like the litigant in Hazel-Atlas, it later attempted to for-

eve seal its deception by the payment of large sums of

money to the participants in its fraudulent scheme. And,

as in Hazel-Atlas, it succeeded in cloaking its wrong for

several years.

34a

I therefore conclude that this case satisfies the second

requirement of Hazel-Atlas.

V

Finally, I find no merit in Great Coastal's argument

that the fraud did not taint its recovery of damages.

While the evidence concerning the secondary boycott was

sufficient to sustain a verdiet, this issue presented ques-

tions for the jury both on liability and damages. As

part II of the majority opinion points out, it cannot be

said “with complete confidence . . that the fraud was

harmlessly excised from the case.” Indeed, the majority

opinion states: “We are in complete accord with the con-

clusions of the district court that 60 (b) (3) would have

provided relief in this case had the union’s motion been

timely ....”

Great Coastal’s argument is similar to the argument

rejected in Hazel-Atias that the fabricated evidence was

not “basic” to the judgment under attack. 322 U.S. at

246. There the Court did not attempt to appraise the

effect of the fraud on the decision making process. In-

stead, it pointed out that the fraudulent litigant deemed

the spurious document to be material. The litigant con-

trived the fraud to deceive the patent office and the court.

The litigant, therefore, was “in no position now to dis-

pute its effectiveness.” 322 U.S. at 247.

Great Coasta! is in the same posture as the fraudu-

lent litigant in Hazel-Atlas. Great Coastal’s fraud was

conceived and used to deceive the National Labor Re-

lations Board and both trial and appellate courts. The jury

that found liability was exposed to the fraud. On appeal

Great Coastal argued that violence—which the district

court later found was self-inflicted—was inextricably tied

in with the secondary boycott. Like the litigant in Hazel-

Atlas, Great Coastal is in no position to dispute the ef-

fectiveness of its fraud.

I would reverse the order of the district court, af-

ford the union equitable relief on its petition filed in this

court, and set aside the judgment because, tested by

Hazel-Atlas, Great Coastal committed a fraud upon the

court.

35a

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 80-1217

GREAT COASTAL EXPRESS, INC.,

Appellee,

V.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Appellant.

Appeal from the United States District Court

for the Eastern District of Virginia

JUDGMENT

This cause came on to be heard on the record from the

United States District Court for the Eastern District of

Virginia, and was argued by counsel.

On consideration whereof, It is now here ordered and

adjudged by this Court that the judgment of the said Dis-

trict Court appealed from, in this cause, be, and the same

is hereby, affirmed.

[Filed Apr. 12, 1982]

/s/ William K. Slate II

Clerk

36a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 80-1217

GREAT COASTAL EXPRESS, INC.,

Appellee,

versus

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, ETC.,

Appellant.

No. 81-2073

GREAT COASTAL EXPRESS, INC.,

Appellant,

versus

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, ETC.,

Appellees.

No. 73-2393

No. 73-2448

GREAT COASTAL EXPRESS, INC.,

Apellee-

Cross-A ppellant,

versus

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, ETC.,

Appellant-

Cross-A ppellee.

[Filed Jul. 1, 1982]

37a

ORDER

Upon consideration of the petition for rehearing and

suggestion for rehearing en banc and, the motion of In-

ternational Brotherhood of Teamsters for leave to file a

reply brief and, the responses to the petition for re-

hearing,

IT IS ORDERED that:

1. the motion of the International Brotherhood of

Teamsters for leave to file a reply brief to the re-

sponse of Great Coastai Express, Inc. to the peti-

tion for rehearing is granted.

2. the petition for rehearing is DENIED. Judge Butz-

ner dissents from the denial of rehearing by the

panel.

No member of the court has requested a poll on the

petition for rehearing en banc.

For the Court

By Direction.

/s/ William K. Slate, II

Clerk

38a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 5-71-R

GREAT COASTAL EXPRESS, INC.,

i: Plaintiff,

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Defendant.

MEMORANDUM

On the date of June 20, 1972, a jury returned a ver-

dict in favor of the instant plaintiff against the defend-

ant in the sum of $1,300,000.00.

On November 22, 1972, the verdict of the jury as to

the amount of damages was set aside, and a new trial

ordered, limited to damages. On April 20, 1973, at the

conclusion of the trial on damages, the jury returned a

verdict in favor of the plaintiff in the sum of $806,093.00.

Judgment was entered in accordance therewith, and on

appeal, taken by the defendant, the matter was affirmed

by the United States Court of Appeals for the Fourth

Circuit in an opinion filed April 2, 1975. Thereafter, on

December 14, 1978, the defendant filed a motion to set

aside the judgment, alleging that the. . . plaintiff has

perpetrated a fraud on this Court, the United States

Court of Appeals for the Fourth Circuit and the National

Labor Relations Board, causing its own equipment and

the equipment of other trucking companies to be damaged

by its own employees, and attributing these acts of vio-

lence to members of IBT affiliates“; and that “. . . the

above-described fabricated acts have culminated in a

judgment against the IBT... .”

39a

Following extensive discovery proceedings, an eviden-

tiary hearing was held on the union’s motion on July 12

and 13, 1979. Thereafter, the Court entered an order de-

nying numerous motions. The union appealed, seeking re-

versal of the Court’s ruling, and thereafter, the United

States Court of Appeals remanded the case to this Court

with the direction that the Court supplement the record by

findings of fact derived from the evidentiary hearing

which had been held.

Pursuant to those directions, the Court makes the fol-

lowing findings of fact, incorporating therein, to the end

that the Court’s findings be read in their appropriate

context, reference to certain of the prior proceedings.

At the evidentiary hearing upon the union’s motion to

set aside judgment for alleged fraud upon the Court, the

union presented nine witnesses: (1) Robert G. Seward,

a driver for Great Coastal during the strike; (2) Betty

Seward, Robert Seward’s wife; (3) William P. Funai,

Great Coastal’s Terminal Manager during the strike; (4)

William Stagg, Jr., Great Coastal’s Assistant Terminal

Manager during the strike; (5) John Martini, a Great

Coastal driver during the strike; (6) Samuel Rogers, a

Great Coastal driver during the strike, presently employed

by Great Coastal; (7) Mack Fifer, a Great Coastal driver

during the strike, presently employed by Great Coastal;

(8) Edmond Christian Nuckols, Jr., a Great Coastal em-

ployee during the strike; and (9) Carmello Thomas Tu-

minello, Supervisor and Dispatcher for Adley Express

during the strike.

No witnesses were called on behalf of the plaintiff.

Charles E. Estes is presently President and owner of

Great Coastal, and held those same 1 ‘sitions during the

strike. During the strike, William P. ."unai, the Termi-

nal Manager of Great Coastal, routinely reported any

damage of Great Coastal equipment to Estes. Estes per-

sonally negotiated the profit-sharing arrangements be-

40a

tween key managerial employees and Great Coastal.

Funai was a key managerial employee who had direct

supervision over the drivers, with the right to hire and

fire drivers. Funai described himself as “the boss” of the

terminal; a fact which corroborated the testimony of

Seward. The drivers took their instructions directly from

Funai, and Funai took his instructions directly from Mr.

Estes. Funai was on profit-sharing during the strike, a

status reserved by the company for managerial personnel.

Funai, according to Great Coastal, was entitled to 2% of

all Great Coastal profits in excess of $100,000.00 by vir-

tue of his status as a manager; in fact, he received

$12,024.22 as his prorated share of the IBT judgment.

Edward L. Flinn was manager of Great Coastal during

the strike, and is presently a manager with the com-

pany. As a manager, Flinn, according to Great Coastal,

was on profit-sharing during the strike, and was entitled

to 2% of all of Great Coastal’s profits in excess of

$100,000.00. Flinn received $12,731.12 as his prorated

share of the IBT judgment.

Robert Williams was Great Coastal’s maintenance su-

pervisor and shop foreman during the strike, a position

which he presently holds. Williams was part of Great

Coastal’s management during the strike and was entitled

to 2% of all Great Coastal profits in excess of

$100,000.00. Williams received $12,822.69 as his share of

the IBT judgment.

One morning during the strike William Stagg, Assistant

Terminal Manager of Great Coastal, was told by C.E.

Estes that he wanted to see Great Coastal’s Terminal

Manager, William Funai. Stagg, in turn, told Funai, who

was at his desk adjacent to Stagg’s, that Estes wanted to

see him. In response to the message, Funai went directly

to the second floor where Estes’ office was located. In ap-

proximately ten to fifteen minutes, Funai came down the

stairs and immediately told Stagg to get the pickup truck

and go to Belk Floor Covering to relieve Robert Seward.

4la

Stagg had never before been asked to relieve any drivers

during the strike and it was “very unusual” that the

request was made in this instance inasmuch as other

drivers were idle and available. Nevertheless, in accord-

ance with Funai’s instructions, Stagg got in the company

pickup truck, and drove to Belk Floor Covering.

On that day, October 23, 1970, Robert Seward was un-

loading a truck at Belk Floor Covering in the City of

Richmond when he was instructed by Stagg to go back to

the terminal. Seward got in the pickup truck left by

Stagg and went back to the terminal while Stagg finished

unloading the trailer at Belk Floor Covering.

Seward went directly to the terminal office and reported

to his boss, William Funai, who ordered Seward to get a

brick or a rock, to take a truck to West Point, to break

out the windshield of the truck and to “tear it up some“.

Funai and Seward discussed the fact that Seward was

“going to break up the truck”, was going to “shoot the

truck” with a gun, and that Seward should wear gloves

because “there might be fingerprints”.

As instructed, Seward got a half brick off of the Great

Coasta! yard and drove a Great Coastal truck to Route

33 off Interstate 64, past New Kent, and pulled off the

road. Seward, wearing gloves in an effort to avoid finger-

prints, threw the brick at the windshield on the passen-

ger side three times; the brick bounced off the windshield

the first two times, but on the third blow crashed through

its center. He then fired three shots into the front of the

Great Coastal trailer using a small handgun—a cheap .22

caliber “Saturday Night Special“.

Seward then proceeded on Route 33 to Green’s Res-

taurant, called the terminal and spoke with Ed Flinn,

but rather than tell Flinn the truth, Seward told a con-

trived story to the effect that unidentified persons had

sabotaged the truck. Thereafter, the police arrived and

Seward took the officer down the road to a point where a

high bank rises from the highway and then levels off into

424

the woods. Although that was not where Seward in fact

had inflicted the damage, Seward, in telling his lie to the

police, designated that as the place where a brick had been

thrown at the windshield of his truck, where he heard

gunshots, and where he saw men running from the bank

away from the road through the woods. Later that same

day Stagg and the employees at the terminal learned that

Seward’s tractor windshield had been knocked out and

his trailer had been “shot up”.

Seward executed a false affidavit concerning the New

Kent incident, identified as IBT Exhibit 3. That affidavit

was witnessed by Edward L. Flinn, and was specifically

incorporated in Great Coastal’s answer to IBT Interroga-

tory No. 14 as “direct evidence of specific instances of

violence, intimidation and secondary boycotting activities

which are recorded in written statements attached hereto”.

Great Coastal’s answers to IBT’s interrogatories were ex-

ecuted under oath by E.C. Estes, Great Coastal’s Presi-

dent, and filed with this Court on March 25, 1971.

Seward gave a false affidavit concerning the New Kent

incident, identified as IBT Exhibit 4, to a representative

of the National Labor Relations Board. Seward also testi-

fied falsely about the New Kent incident in a proceeding

before the National Labor Relations Board.

Seward was called as a witness for Great Coastal at the

trial before this Court on June 15, 1972. He falsely testi-

fied that he was driving toward New Kent in October

1970 when a brie” came through the windshield on the

passenger side, aud that he saw men running away

through the woods. Seward admitted at the hearing in

July, 1979 that he gave perjured testimony before this

Court in 1972.

William P. Funai was called as a witness for Great

Coastal at the trial before this Court on June 15, 1972

and testified that during the strike he went to West Point,

Virginia to look at a Great Coastal truck and saw t] he

front windshield was broken on it” and there was “a

43a

small hole” in the trailer which looked like it was caused

by “a shot, a small caliber gun”. When asked in 1972

whether he “saw anybody do anything to that truck”,

Funai answered, “I seen the damage . . and nothing

else”. Funai now concedes that he failed to “tell the

truth, the whole truth, and nothing but the truth” in his

1972 testimony; he admits that he failed to tell every-

thing he knew about the New Kent incident to the Court

and he therefore violated his sworn oath before this

Court. When Funai asked whether he told Seward to sabo-

tage his equipment, Funai refused to answer “on the

grounds that the answer might tend to incriminate me“.

The Court’s conclusion as to Seward’s having testified

falsely at the first trial is made independent of Funai's

exercise of his right against self-incrimination.

Edward Flinn is presently manager at Great Coastal

and was also manager at the company during the strike.

Some time in 1978 Robert Seward spoke with Ed Flinn at

the Great Coastal terminal and told Flinn the truth about

the New Kent incident. Flinn stated to Seward that at

one time he, Flinn, was trying to trace down the New

Kent incident, but someone told Flinn to “lay off” because

he was “getting close to something in his investigation”.

The Court’s finding in this regard is admittedly prompted

by the absence of any testimonial denial on the part of the

plaintiff.

When Local 592 struck Great Coastal in 1970, Adley

Express, a trucking company in the Richmond area, en-

joyed a greater demand for its services and began hiring

extra roadmen who were out on strike against Great

Coastal. After the strike began, Ed Flinn, manager of

Great Coastal, placed a telephone call to Carmello Thomas

Tuminello, dispatcher at Adley. Flinn wanted to know

who was in charge at the time, and Tuminello responded

that he was. Flinn said, I'd like to see if you could do

us a favor” and asked if Adley was “running any extra

road drivers that are out on strike that work at Great

44a

Coastal”. When Tuminello responded that Adley was

running six or seven of them every night, Flinn asked if

Adley “could stop running the roadmen on the road, so we

could starve the sons of bitches out and make them come

back to work at Great Coastal”. Flinn went on to say that

this would help Great Coastal “get rid of the union”.

Tuminello told Flinn that his boss, the terminal manager,

who was not there at that moment, said the men were

qualified drivers, Adley needed extra men, and he would

continue to run them until he had further notice from his

own boss.

During the strike Seward was ordered by Funai to go

to Adley and East Coast to “punch tires and tear up

trucks” [Tr. 40, 95 (Seward) J. Funai handed three

“punches” to Seward that were prepared in Great

Coastal’s maintenance shop and sent him to a motel in

Richmond to wait for the other members of the “raid-

ing” party.

That night Seward was met at the motel by three other

Great Coastal employees, Sam Rogers, Mack Fifer and

Chris Nuckols, and together, upon orders from Funai,

they went on a “raid” to Adley, driving to Adley in

Nuckols’ car. Seward, Rogers and Nuckols punctured

tires while Fifer slashed the air hoses off the Adley

trucks. Tuminello spotted the four marauders under the

Adley trucks while making a yard check, but by the time

he returned with assistance, all he found were punctured

tires and slashed air lines on the Adley equipment.

Tuminello noted that one was wearing a Great Coastal

jacket and later recalled the identity of one of them as

“Seward”.

Thereafter, similar acts of vandalism were conducted

by Seward and Nuckols at the East Coast Freight yard.

Seward was corroborated in regard to these acts by

several witnesses.

During the strike Funai asked Seward to shoot the

windows out of the Great Coastal office with an old

45a

double barrel shotgun. Seward declined because there

were pickets nearby and the police were also in the

vicinity.

Also during the strike, Funai instructed Seward and

Chris Nuckols to purchase a slingshot for the purpose

of breaking truck windshields. The testimony of Seward

in this regard is corroborated by Nuckols. Seward and

Nuckols purchased a slingshot from a sporting goods

store, and Seward was with Funai, the Terminal Man-

ager, when Funai submitted a ticket to Great Coastal

petty cash for reimbursement of the slingshot. Seward

and Nuckols tried to use the slingshot in the Great

Coastal yard to break the windshield of Great Coastal

trucks, but their efforts were to no avail because the shot

could not be propelled with sufficient force to damage the

windshield glass.

During the strike Martini heard Estes and Flinn ex-

press their appreciation to the drivers for their “irrita-

tion and agitation” of the pickets. Martini also heard

Estes and other officers of Great Coast: l express apprecia-

tion when Great Coastal trucks would come in damaged.

In response to an inquiry from the Court on the attitude

of Great Coastal managers about damage to the trucks,

Martini testified that when damaged equipment came into

the terminal, these officials would say words to the effect

that, this is what we need“.

On November 24, 1971, as a result of an election, the

National Labor Relations Board decertified Local 592 as

representative of the Great Coastal employees. Seward

had, at the request of a Great Coastal manager, been

active in seeking the decertification of the union.

Within three weeks of Great Coastal’s elimination of

the union, Estes called Seward into his office and handed

Seward $500.00 in cash. At that time, Estes said to

Seward, “keep it to [your]self”’, and told Seward he

could “call it a Christmas bonus or pay for a job well

done”. This $500.00 payment is no where reflected on

46a

the company’s books and records. Certain of the com-

pany’s records for the relevant time period have been

destroyed, but Great Coastal’s custodian of records has

no recollection of the circumstances underlying the de-

struction of those documents.

Emmett Williamson, Great Coastal’s Treasurer and

General Manager, testified that during the strike each

“managerial” employee who was on profit-sharing with

Great Coastal was “reassured by the company that he

would receive his agreed percentage of profits if the com-

pany were later to recover damages from the union”.

Notwithstanding the company policy that a manager

on profit-sharing must have been with Great Coastal at

the time of recovery against the IBT, William P. Funai,

in July 1976—more than five years after Funai had

left the employ of Great Coastal—received $12,024.22

($8,927.99 net after-tax dollars) as his share of Great

Coastal’s recovery against the IBT.

The Court is satisfied and finds as a fact that much

of the testimony offered by the plaintiff in the first trial

dealing with the alleged acts of violence by the defendant

was perjured.

Just as the perjurors are, regrettably, free from prose-

cution for perjury by virtue of the statute of limitations,

the one year limitation precludes the instant defendant

from relief under Rule 60(b) (3) for the reasons stated

in the Court’s memorandum of February 29, 1980.

Let the Clerk send copies of this memorandum to all

counsel of record, and return the records in this cause,

along with this memorandum, to the United States Court

of Appeals for the Fourth Circuit for such action as it

may deem appropriate.

s, Robert R. Merhige, Jr.

United States District Judge

Date: Aug. 27, 1981

47a

APPENDIX D

UNITED STATES CCURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 80-1217

(No. 73-2393) Related Cases

(No. 73-2448)

GREAT COASTAL EXPRESS, INC.,

Appellee,

— —

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Appellant.

Appeal from the United States District Court

for the Eastern District of Virginia, at Richmond

Robert R. Merhige, Jr., Judge

Argued November 13, 1980 Decided December 23, 1980

Before BUTZNER, Circuit Judge, JOE MACDONALD

INGRAHAM, Senior Circuit Judge for the Fifth Circuit,

sitting by designation, and RUSSELL, Circuit Judge.

48a

Ira R. Mitzner (Barry Wm. Levine, Kenneth M. Simon,

Jeffrey M. Johnson, Dickstein, Shapiro & Morin; George

Kaufmann on brief) for appellant; J. W. Alexander, Jr.

(Blakeney, Alexander and Machen; James M. Minor, Jr.,

Minor, Marshall, Forb & Batzli, P.C., on brief) for

appellee.

PER CURIAM:

The district court, without stating findings of fact,

denied a motion to set aside a judgment which was

sought on the ground that the judgment creditor had

allegedly committed a fraud on the court. The judgment

debtor asserts that sinc. the court denied its motion as

a matter of law, we must accept as true all of the evi-

dence that was presented at an evidentiary hearing on

the motion. It contends that the legal standard of fraud

the court adopted was erroneous in the light of this evi-

dence. The judgment creditor did not address the argu-

ment that the court’s standard was erroneous. Instead,

it argues that there was insufficient evidence of fraud

to justify setting aside the judgment.

While it is permissible for us to affirm a judgment on

grounds that are different from those articulated by the

district court, we believe that the absence of specific find-

ings of fact makes such a course improvident in this

case. We therefore remand the case to the district court

with directions that it supplement the record by findings

of fact derived from the evidentiary hearing which it

conducted.

REMANDED.

49a

APPENDIX E

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 5-71-R

GREAT COASTAL EXPRESS, INC.,

Plaintiff

V.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Defendant

[Filed Feb. 29, 1980]

ORDER

For the reasons stated in the memorandum of the

Court this day filed and deeming it proper so to do, it

is ADUDGED and ORDERED that the motions of the

International Brotherhood of Teamsters, Chauffeurs,

Warehousemen and Helpers of America for relief from

judgment and for post-hearing argument be, and the

same are hereby denied, and this matter is to be placed

amongst the ended causes.

Let the Clerk send copies of this order and the Court’s

memorandum to all counsel of record.

s, Robert R. Merhige, Jr.

United States District Judge

Date: Feb. 29, 1980

50a

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 5-71-R

GREAT COASTAL EXPRESS, INC.,

Plaintif

V.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

Defendant

MEMORANDUM

The instant controversy between these parties evolves

from litigation first commenced in December, 1970 by

Great Coastal Express, Inc. (“Great Coastal” or “the

Company”), against the International Brotherhood of

Teamsters, etc. (“IBT” or “the Union”). As more fully

developed, infra, the action resulted in a judgment for

Great Coastal in the amount of $806,093. The parties are

now before the Court on the Union’s motion to set aside

the aforementioned judgment. Also pending is IBT’s mo-

tion for further argument in the case.

Great Coastal is an interstate truck carrier based in

Richmond, Virginia. At all times relevant to this action

the Company's prir ary business was the shipment of

general commodity freight from twenty-six Virginia

counties to New Je: sey and parts of New York, Pennsyl-

vania and Connecticut. IBT is a labor organization within

the meaning of 29 U.S.C. § 152(5).

The Court of the opinion that post-hearing argu-

ment is unnecesyary and, accordingly, the Union’s motion

to that effect must be denied. The issues raised by IBT's

motion to set aside judgment have been addressed in post-

judgment discovery and the evidentiary hearing which

51a

was conducted on July 12, and 13, 1979. The Union has

submitted Proposed Findings of Fact and Conclusions of

Law. Great Coastal tendered a Proposed Memorandum

decision and draft order. It is thus apparent that the

parties have had ample opportunity to present their ar-

guments. While the implications of the Union’s motion

are grave, the legal issues are fairly settled and addi-

tional argument would thus not be of great benefit. The

motion to set aside judgment is deemed ripe for disposi-

tion and, for reasons which follow, also must be denied.

I. HISTORY OF THE LITIGATION

A full appreciation of the issues presently decided rests

upon an understanding of the various stages through

which this controversy has progressed.

Prior to the difficulties which precipitated this action,

the parties were signatories to the N. jonal Master

Freight Agreement. Great Coastal’s part cipation under

that contract terminated on March 31, 1970. Negotia-

tions between the company and IBT after the expiration

of that contract reached an impasse and a strike against

Great Coastal was begun in August, 1970.

Great Coastal thereafter commenced suit in the Law

and Equity Court of the City of Richmond, Virginia dur-

ing December, 1970. IBT subsequently removed the ac-

tion pursuant to 28 U.S.C. §$1441(b) contending that

plaintiff’s allegations purported to state a claim under

sections 301 and 303 of the Labor Management Relations

Act, 29 U.S.C. S8 185 and 187.

The case was tried before a jury on June 14, 15, 16,

19 and 20, 1972. The Company argued that the Union

had engaged in two species of illegal strike activity.

First, Great Coastal contended that the Union had com-

mitted acts of violence, primarily in damaging the Com-

pany’s equipment. Additionally, Great Coastal argued

that the Union had engaged in unlawful secondary boy-

cotting activities.

52a

From the outset, IBT objected to the introduction of

evidence concerning acts of violence. Great Coastal was

permitted to proceed with evidence of this claim upon

the Company’s proffer that it would ultimately be linked

to the Union. At the close of Great Coastal’s case, how-

ever, it was apparent that the proffer had not been satis-

fied. Accordingly, a directed verdict was entered in favor

of IBT with respect to all claims arising from the alleged

acts of violence.

The claim of illegal boycotting was, however, submitted

to the jury. The Company presented its claim through

the testimony of its customers and employees, the presi-

dent of the IBT Richmond Local and an international

director of the Union. The jury returned a verdict in

favor cf Company in the amount of $1,300,000, an

amount w...ch the Court concluded was in excess of that

which was proper.

The Union moved for judgment n.o.v.; which motion

was denied. The verdict was, however, set aside as being

excessive. The Court was also of the view that the jury’s

award reflected, at least in part, an influence from the

evidence of the violence. Great Coastal Express, Inc., V.

International Brotherhood of Teamsters, 350 F.Supp.

1377, 1380 (E.D.Va. 1972). The Court was not per-

suaded, however, that the violence evidence tainted the

jury’s determination of liability for secondary boycotting.

Id. at 1382.

A second jury trial was held on April 19 and 20, 1973.

The sole question in issue was the amount of damages

sustained by Great Coastal as a result of the Union’s

secondary boycotting activities. This jury awarded Great

Coastal $806,093 and judgment was entered upon that

verdict.

The parties thereafter filed cross appeals in the United

States Court of Appeals for the Fourth Circuit. Great

Coastal contended that the Court committed error in

53a

granting a directed verdict on the claims arising from

the alleged violence. The Company urged this issue upon

the Appellate Court conditionally; it sought consideration

only if the Fourth Circuit did not affirm the judgment

on the secondary boycotting claim. The judgment was

affirmed and the question was thus not considered.

Especially relevant for purposes of the instant motion

was IBT’s contention before the Fourth Circuit that the

first jury’s determination of liability for secondary boy-

cotting had been infected by the evidence of violence. The

Fourth Circuit’s opinion in this regard is instructive, al-

though from the Court’s view would not, in any event,

alter the instant decision.

The Fourth Circuit specifically found that the presump-

tion in favor of the jury’s verdict had not been overcome.

Great Coastal Express, Inc., v. International Brotherhood

of Teamsters, 511 F.2d 839, 847 (4th Cir. 1975). The

Appellate Court noted that the jury had been instructed

not to consider the evidence of violence. The Court

further found that the determination of liability was sup-

ported by “admitted and abundant evidence.” Jd. The

Court also opined that the first jury’s excessive award was

as likely the result of confusion as it was prejudice from

the evidence of violence. Id.

The Union’s writ of certiorari was denied by the

United States Supreme Court, 425 U.S. 975 (1976), and

the matter was considered ended until the filing of the

instant motion.

II. THE EVIDENTIARY HEARING

Following the completion of post-judgment discovery,

the Court held an evidentiary hearing on July 12 and 13,

1979. The most relevant testimony given at this hearing

concerned what came to be known as the “New Kent”

incident.

The Court heard the testimony of Robert G. Seward, a

Great Coastal driver, at the first trial of this matter in

1972. Seward then testified that during the strike he was

54a

driving company equipment near New Kent, Virginia

when unidentified persons hurled a brick through the

windshield and shot the cab with a small caliber gun.

Great Coastal terminal manager William P. Funai tes-

tified that he had seen the damaged truck but had no

personal knowledge of the incident. This version of the

New Kent incident was reported to the police and the Na-

tional Labor Relations Board, as well.

Seward testified at the evidentiary hearing that his

1972 testimony was false. Seward’s present version of the

New Kent incident is that he inflicted the damage to the

rig upon Funai’s direction. The evidentiary hearing also

heard Funai admit that a portion of his 1972 testimony

was not truthful.

Other evidence was adduced at the 1979 hearing. The

additional evidence falls into two categories. First, there

was evidence tending to show the Company’s reliance upon

other perjured testimony or false evidence. Second, there

was evidence of fraud unrelated to the instant controversy

which was offered for the purpose of showing the Com-

pany’s motive or intent.

IBT filed the motion presently under consideration;

premised on allegations which were supported by the

aforementioned evidence. It should be reiterated that the

evidence of fraud related to this litigation was entirely

concerned with perjury and fabricated evidence. In light

of the character of the evidence, and the Court’s under-

standing of the standard for relief, it is unnecessary to

address the evidence in greater detail.

The Union’s motion is predicated upon allegations of

a fraud upon the Court and what are said to be “other

reasons justifying relief.” In addressing those claims the

Court deems it necessary to first consider the scheme of

Fed.R.Civ.P. 60(b). To fully explicate the Court’s view

of the issues involved it will also be necessary to con-

sider Fed.R.Civ.P. 60 (b) (3) and the availability of re-

lief by independent action.

55a

III. FEDERAL RULES CIVIL PROCEDURE 60 (b

Rule 60(b) Fed.R.Civ.P. sets forth grounds upon which

a party may be relieved from the operation of a judg-

ment. The Rule was amended in 1946 in an attempt to

reconcile what has been described as conflicting values.

The first is embraced by the doctrine of finality which the

law attaches to judgments. Additionally, the amendment

sought to recognize and provide a vehicle for relief from

judgment in appropriate cases.

The result of the attempt to reconcile the aforemen-

tioned values is, not surprisingly, a balancing process.

For example, fraud inter partes, however it may be char-

acterized, is ground for relief within a year of judgment.

Until the expiration of that one year period the second

value predominates. Thereafter the balance shifts toward

finality.

Rule 60(b) also recognizes the Court’s inherent power

to set aside its judgment when a fraud has been prac-

ticed upon the Court. Here the determinative question

involves characterizing the species of fraud presented.

Finally, Rule 60(b) preserves the Court’s power to

entertain an independent action to set aside the judg-

ment. The independent action rests upon the Court’s

equitable jurisdiction, Sayers v. Burkhardt, 85 F. 246

(4th Cir. 1898), cert. denied, 172 U.S. 649 (1899) and

has long been an accepted part of our jurisprudence. See

e.g., Marine Insurance Company v. Hodgson, 7 Cranch

332 (1813).

A. Rule 60(b)(3)

It is readily apparent that the Union’s motion could

have been embraced by Fed.R.Civ.P. 60 (b) (3). That

portion of Rule 60 provides:

On motion and upon such terms as are just, the

Court may relieve a party or his legal representative

from a final judgment, order, or proceeding for the

56a

following reasons: (1) ... (2) ... (8) fraud

(whether heretofore denominated intrinsic or ex-

trinsic), misrepresentation, or other misconduct of

an adverse party.

A 60(b) (3) motion must be made, however, “not more

than one year after the judgment.” Id. Judgment was

entered against IBT in 1973 and affirmed by the United

States Court of Appeals for the Fourth Circuit in 1975.

The records reflect that the instant motion was not filed

until 1978.

The Court may accept the Union’s allegations as estab-

lishing the use of perjured testimony and false evidence.

Relief would be precluded under 60 (b) (3) even under

that assumption, however, by virtue of the untimely filing

of the motion. It may also be questioned whether the

Union would have been entitled to relief upon proven

fraud raised by timely motion in light of the decisions

by this Court and the United States Court of Appeals

for the Fourth Circuit that the evidence of violence intro-

duced in the original trial did not affect the determination

of liability for secondary boycotting. It is to be noted,

however, that the Union’s allegations, if factual, relate to

a fraud within the purview of Rule 60(b) (3).

B. Rule 60(6)(6)

The Union was undoubtedly aware that a Rule 60(b)

(3) motion was untimely. It thus, understandably, prem-

ised its motion on Fed. R. Civ. P. 60 (b) (6) and che fraud

which was alleged to have been perpetrated upon the

Court. The Court next considers the availability of relief

under Rule 60(b) (6).

Subparagraph six authorizes a court to relieve a party

from the operation of a final judgment “for any other

reason justifying relief.” This provision follows the enu-

meration of five specific grounds for relief and thus may

be properly viewed as a residuary clause intended to en-

57a

compass contingencies which could not have been foreseen

by the Rule’s drafters. 7 J. Moore, Federal Practice

§ 60.27(1). A motion under Rule 60(b) (6) need only be

made within a reasonable time.

It thus appears that there are two prerequisites to re-

lief under Rule 60(b) (6). It may be assumed that IBT’s

motion was made within a reasonable time following the

final judgment in this matter. The motion fails to state

a proper claim for relief, however, because it does not

rest upon “any other reason” than those specified in the

preceding five subparagraphs of the Rule. (Emphasis

added). The allegations of the Union and its proof ad-

duced at the evidentiary hearing demonstrate, at most,

grounds for relief ander Rule 60 (b) (3).

In Klapprott v. United States, 335 U.S. 601 (1949), the

petitioner challenged a judgment, entered by a district

court several years earlier, revoking his citizenship. The

government contended that petitioner had, at most, shown

“excusable neglect” which could be the basis for relief un-

der Rule 60(b) (1), but for the applicable one year Jimita-

tion. In this regard the Court stated:

It is contended that the one-year limitation bars

petitioner on the premise that the petition to set

aside the judgment showed, at most, nothing but

“excusable neglect.” And, of course, the one-year

limitation would control if no more than “neglect”

was disclosed by the petition. Jn that event the peti-

tioner could not avail himself of the broad “any other

reason” clause of 60(b). 335 U.S. at 613. (Em-

phasis added).

See also 335 U.S. at 614-15 where the Court further dis-

tinguishes Rule 60 (b) (1) to (5) from 60 (b) (6). It is

apparent that the phrase any other reason“ is to be

accorded its usual meaning; especially in light of the

fact that it follows the enumeration of five specific

grounds for relief. See also Stancil v. United States, 200

F.Supp. 36 (E.D.Va. 1961) (relief under 60(b) (5) pre-

cluded when properly raised under 60(b)(1) but for

the one-year limitation) and cases cited at n.18 in 7 J.

Moore, Federal Practice, § 60.27(1).

IBT previously cited Stradler v. Hall, 20 F. R. Serv. 2d

531 (4th Cir. 1975) to the Court in connection with a

question related to the instant motion. In Stradler the

Court granted summary judgment in April, 1974 and the

Rule 60 (b) motion was filed in June, 1974. The Court

held that the movant could proceed under both 60(b) (1)

and 60(b)(6). It should be noted, however, that the

Court in Stradler was not presented with the preclu-

sive effect of the one-year limitation of 60 (b) (1). It does

not, therefore, present a reason for distinguishing Klap-

prott, supra and thus does not affect the Court’s analysis.

Rule 60(b) (6), on its face, necessitates a ground for

relief distinct from those provided in the preceding five

subparagraphs. The Court is of the view that IBT’s con-

tention must be rejected for an additional reason. Were

the Court to afford 60(b)(6) relief in a situation en-

compassed by 60(b) (3), the one-year limitation of the

latter provision would become meaningless. The Court

cannot adopt an interpretation which is in obvious con-

flict with the Rule’s framework. The motion under Rule

60(b) (6) thus must be denied.

C. Fraud Upon The Court

Fed.R.Civ.P. 60(b) recognizes the Court’s inherent

power to grant relief from judgment when the Court has

been subjected to a fraud. Fraud upon a court is a mat-

ter which is so grave that the rules permit relief to be

afforded without regard to any time limitation. In fact,

a successful movant may be relieved from a judgment

procured through fraud upon the court even though the

movant has been guilty of laches. Hazel-Atlas Glass Co.

v. Hartford Empire Co., 322 U.S. 238 (1944). Because

the instant motion falls beyond the one-year limitation

of Rule 60(b) (3) it is necessary to consider whether the

alleged fraud, as grave as it is, rises to that properly

denominated as “fraud upon a court.” Failure to make

the necessary distinction would, as noted supra, emascu-

late the one-year limitation.

The Court is satisfied that the fraud alleged by IBT

would only have been perpetrated upon the Union rather

than upon the Court. “Fraud upon the court” should em-

brace only that species of fraud which interferes with

the court’s discharge of its judicial functions. The most

blatant examples of such fraud are bribery or corruption

of the court, its officers or the jury. See 7 J. Moore,

Federal Practice, § 60.33 and cases cited at n.40. A

persuasive definition of “fraud upon the court” empha-

sizes that the term should:

Embrace only that species of fraud which does or at-

tempts to, defile the court itself, or is a fraud perpe-

trated by officers of the court so that the judicial ma-

chinery cannot perform in the usual manner its

impartial task of adjudging cases that are presented

for adjudication. Fraud inter partes, without more,

should not be a fraud upon the court, but redress

should be left to a motion under 60(b) (3) or to the

independent action. Id. at 515.

Perjured testimony and false evidence obviously interfere

with the court’s role in discovering the truth. That alone

does not, however, “defile the court itself.” The above-

quoted passage and its analysis is consistent with the

views of many of the Circuit Courts of Appeal. Pfizer,

Inc., v. International Rectifier Corporation, 538 F.2d 180

(8th Cir. 1976), cert. denied, 429 U.S. 1040 (1977);

Vandervoort v. Vandervoort, 529 F.2d 424 (5th Cir.

1976); Wilkin v. Sunbeam Corporation, 466 F.2d 714

(10th Cir. 1972), cert. denied, 409 U.S. 1126 (1973);

Kupferman v. Consolidated Research and Manufacturing

Corporation, 459 F.2d 1072 (2d Cir. 1972); and Kenner

60a

v. Commissioner, 387 F.2d 689 (7th Cir.), cert. denied,

393 U.S. 841 (1968). The Court has been unable to find,

and neither party has cited, a case decided by this Cir-

cuit expounding upon the phrase “fraud upon the court.”

The Court, based upon its reading of the precedent, is

satisfied that this Circuit would also find Moore’s discus-

sion persuasive.

The Union has urged Hazel-Atlas, supra upon the

Court as the legal basis for finding that the alleged fraud

would be remediable. Hazel-Atlas evolved from a patent

infringement suit commenced by Hartford-Empire.

Hartford-Empire officers, with the participation of their

attorney, fraudulently secured false evidence which was

relied upon in obtaining the patent in question and in

prosecuting an appeal before the Seventh Circuit. The

Court held that the Circuit Court had inherent power to

set aside its judgment as well as that entered by the dis-

trict court pursuant to the Circuit Court’s remand.

Although the dicta of Hazel-Atlas is sufficiently broad

to encompass the fraud alleged in the instant matter, the

actual situation there presented is distinguishable. The

iraud of Hazel-Atlas included the participation of the

Hartford-Empire attorney—-an officer of the court. Hazel-

Atlas, viewed in this light, is consistent with the formula

advance by Moore. In fact, the court stated:

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. /d. at 245.

The Court has reviewed IBT’s proposed findings of fact

and conclusions of law and has found nothing therein

advocating a finding by the Court that would implicate

Great Coastal’s attorneys in the fraud, nor indeed has

any evidence leading to such a conclusion been introduced.

There is thus no basis for finding a fraud upon the

Court. Indeed, much of the Hazel-Atlas dicta relied upon

by IBT related to the court’s power to grant relief once

6la

it has been shown that a fraud was perpetrated upon the

court.

Applying the Hazel-Atlas dicta in accordance with

IBT’s interpretation of the opinion would require the

Court to conclude that Hazel-Atlas overruled or modified

its precedent, sub silentio. It is clear that this was not

the Court’s intent for Hazel-Atlas was said to rest upon

“settled equitable principles.” 322 U.S. at 247. Neither

the fact that the fraud involved a scheme or affected a

broader public interest than merely the outcome of the

litigation are alone sufficient to justify the Hazel-Atlas

decision nor afford relief in the instant case. Those fac-

tors are presented in Throckmorton, infra and yet relief

was denied.

In short, the Court is of the opinion that the participa-

tion of the attorney, an officer of the court, was the

impetus for elevating fraud inter partes to a fraud upon

the court. The Union having shown at best fraud inter

partes is not entitled to relief upon this basis.

D. The Independent Action In Equity

Fed.R.Civ.P. 60(b) “does not limit the power of a

court to entertain an independent action to relieve a

party rom judgment. A motion under Rule 60 (b)

may properly be treated as the commencement of such

an independent action. H. K. Porter Company v. Good-

year Tire and Rubber Company, 536 F.2d 1115 (6th Cir.

1976); Bankers Mortgage Company v. United States,

423 F.2d 73 (5th Cir.). cert. denied, 399 U.S. 927 (1970).

While not treated as such by IBT, the Court has consid-

ered whether the Union’s allegations and proof provide

a sufficient ground for relief. Here, too, the dispositive

issue is the type of fraud which will support an inde-

pendent action.

In United States v. Throckmorton, 98 U.S. 61 (1878),

it was contended that a predecessor in title had perfected

same through a fraudulently antedated document show-

62a

ing a grant from the Mexican government. In resolving

the controversy the court was required to balance the

competing values of finality of judgment and preventing

a party from benefiting from his fraud. The court held

that only extrinsic fraud, and not intrinsic fraud, would

support an independent action to set aside a judgment.

The court noted that whether in law or equity, a direct

appeal lies to correct errors of both the court and the

jury. Finality of judgment is not disturbed since the

review is a continuation of the original action. But after

the exhaustion of foreclosure of direct review, the chal-

lenge to the judgment is no longer part of the original

suit and, hence, finality must be afforded some measure

of protection.

At that point finality is given the highest priority under

all but exceptional circumstances, because:

The mischief of retrying every case in which the

judgment or decree rendered on false testimony,

given by perjured witnesses . . . would be greater,

by reason of the endless nature of the strife, than

any compensation arising from doing justice in

individual cases. 98 U.S. at 68-69.

The exception for which finality is superseded by indi-

vidual justice is, in the case of fraud, extrinsic fraud.

Extrinsic fraud, while often difficult to distinguish

from intrinsic fraud, is characterized as a fraud collat-

eral to the issues before the court. It would include, inter

alia, a party keeping his adversary or his witnesses away

from court, a false promise of compromise or the breach

of any attorney’s loyalty to his client. The aforemen-

tioned examples of extrinsic fraud share a common de-

nominator which justifies the exception: Extrinsic fraud

prevented there ever being an adjudication of the issues

joined.

The Union’s allegations relate merely to the possible

commission of intrinsic fraud by Great Coastal. The

63a

Company’s fraud would have related to the matters in

controversy, i. e., the violence claim. Nor can it be said

that any effort by the Company to conceal the fraud and

hence, evidence suitable for impeachment, prevented a

true adjudication of the issues. To adopt that reasoning

would permit the exemption to swallow the rule.

It has been suggested that Throckmorton, supra was

expanded to include intrinsic fraud in Marshall v. Holmes,

141 U.S. 589 (1891). In this regard, the Court notes

that the Marshall case may strictly be cited only for its

ruling on removal procedure and aggregation of claims

for purposes of federal jurisdiction. The discussion per-

taining to fraud was mere dictum.

The Court does not share the commentator’s concern

over the Marshall dicta and its effect upon the vitality of

Throckmorton. The passage which created the apparent

conflict quotes Marine Insurance Co., supra at 336 stat-

ing:

It is the settled doctrine that “any fact which clearly

proves it to be against conscience to execute a judg-

ment, and of which the injured party could not have

availed himself in a court of law, or of which he

might have availed himself at law, but was prevented

by fraud or accident, unmixed with any fault or

negligence in himself or his agents, will justify an

application to a court of chancery.” (Emphasis

added). Marshall, supra at 596.

The Court is of the view that the emphasized portion,

which is conjunctive with the unconscionability element,

comports with the notion of extrinsic fraud and is thus

not inconsistent with Throckmorton.

Of greater import is the decision of Aetna Casualty &

Surety Company v. Abbott, 130 F.2d 40 (4th Cir. 1942).

In Aetna the rule was set forth for this Circuit:

—

64a

Even if the language be construed as charging that

the judgment sued on was procured by means of

perjured testimony, this would not be sufficient; for

it is well settled that this constitutes no ground

upon which the court could disregard the judgment

or deny its enforcement in an independent proceed-

ing. The frauds which justify such action in an in-

dependent proceeding between the same parties or

their privies are those which are extrinsic or col-

lateral to the matter tried, and not frauds, such as

perjured evidence, which were “actually presented

and considered in the judgment assailed.” United

States v. Throckmorton, 98 U.S. 61, 66. (Emphasis

added, other citations omitted).

The Union having shown at best intrinsic fraud, may

not prevail in an independent action to set aside the

judgment in this case.

IV. CONCLUSION

For the aforementioned reasons, the Court concludes

that IBT is not entitied to the relief it seeks. Assuming

arguendo that the allegations of fraud are factual, it is

clear that Rule 60(b) (3) would have been an appropriate

vehicle for seeking relief. As the Cou.+ has already indi-

cated, relief under Rule 60(b) (3) is, however, foreclosed

at least on account of the one year limitation. Fraud em-

braced by Rule 60(b) (3)may not be considered a proper

basis for relief under Rule 60(b) (6). The Union’s alle-

gations can neither be characterized as contending that

a fraud was committed upon the Court, nor as the per-

petration of an extrinsic fraud. IBT’s motion for relief

from judgment must, therefore, be denied.

An appropriate order shall issue.

/s/ Robert R. Merhige, Jr.

United States District Judge

Date: Feb. 29, 1980.

65a

APPENDIX F

UNITED STATES DISTRICT COURT

E. D. VIRGINIA

RICHMOND DIVISION

Nov. 22, 1972

Civ. A. No. 5-71-R

GREAT COASTAL ExpRrzss, INC.,

V.

INTERNATIONAL BROTHERHOOD OF TEAMS TERS, ETC.

James Minor, Jr., Richmond, Va., J. W. Alexander,

Jr., Charlotte, N. C., for plaintiff.

Raymond L. Bergan, Paul Martin Wolff, Earl C. Dud-

ley, Jr., Washington, D. C., for defendant.

MEMORANDUM

MERHIGE, District Judge.

The International Brotherhood of Teamsters (herein-

after Union“), pursuant to Rule 59, Federal Rules of

Civil Procedure, has moved the “ourt for judgment non

obstante veredicto (N. O. V.), as a consequence of a jury

verdict rendered against it in excess of one million dol-

lars. Both parties have exhaustively briefed the issues

raised by the Union’s motion, and it is upon said briefs

and the record before it that the Court finds these mat-

ters ripe for disposition.

The plaintiff, a freight trucking corporation, originally

brought suit in the Law and Equity Court of the City of

Richmond in December of 1970, against the Union for

alleged damages accruing from a protracted strike, ac-

66a

companied by alleged widespread union violence and sec-

ondary boycotting. The original State court motion for

judgment demanded $3,500,000 compensatory damages

and $2,500,000 punitive damages. The defendant Union

removed that action to this Court invoking jurisdiction

pursuant to §§ 301, 303 of the Labor Management Rela-

tions Act (LMRA), 29 U.S.C. §§ 185, 187, and the re-

moval statute, 28 U.S.C. § 1441 (b). A jury trial was

demanded.

In November 1971 the plaintiff submitted a trial brief

whereby it specified causes of action for compensatory and

punitive damages under LMRA § 303 (29 U.S.C. § 187)

and the common (tort) law of Virginia respectively. In

response, the Union’s trial brief raised issues with respect

to the § 303 claim, which issues are the gravamen of the

present motion, and averred that plaintiff’s common law

tort claim was not substantiated by a clear showing of

the International Union’s (defendant) participation in

the alleged tortious activity as required by §6 of the

Norris-LaGuardia Act, 29 U.S.C. § 106 and United Mine

Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d

218 (1965).

Upon completion of plaintiff’s case at trial, the defend-

ant Union moved for a directed verdict. The motion was

granted with respect to the violence (common law) claim,

the Court having concluded that the plaintiff had not sus-

tained the burden of producing a clear showing of the de-

fendant’s participation in that regard as required by the

statutory law and the principles of Gibbs, supra.

A directed verdict for the Union with respect to the

secondary boycott claim was, however, denied. The Court,

though satisfied that the oral testimony adduced was in-

sufficient to sustain a finding of agency between the

strikers and the defendant Union, concluded that it was

bound as to that issue by the principles enunciated by its

appellate court in the case of International Brotherhood

of Teamsters v. United States, 275 F.2d 610 (4th Cir.

67a

1960), discussed infra, and accordingly permitted the sec-

ondary boycott claim to go to the jury.

Upon summation to the jury, plaintiff’s counsel averred

that it had shown actual damages proximately resulting

from the alleged secondary boycotting in the amount of

$942,065.00. In the course of its deliberations, the jury

inquired of the Court, What amount of damages lost in

dollars is the plaintiff asking? Is it the $942,065 figure?”

After colloquy with counsel, the Court instructed the jury,

“The direct answer to that inquiry is yes . . I must tell

you that you are not to concern yourselves with what

the plaintiff asks for unless it coincides with the evi-

dence as you find it.” The jury subsequently returned a

verdict for $1,300,000.00.

The Union has predicated its motion for judgment

N. O. V. on a number of grounds, many of which deal with

matters best left for appellate review.' The Court is duty

bound, however, to consider several of the issues raised

thereby, which may be delineated as follows:

1. Was there a requisite showing of agency made by

the plaintiff by which the defendant, the parent union,

could be held accountable for acts of its members and/or

local affiliates?

2. Was the jury finding of damages made in accord-

ance with the mandate of LMRA § 303?

3. Were charges to the jury of such a contradictory

nature so as to be confusing or otherwise an impediment

to impartial jury deliberation?

The defendant has averred that insufficient evidence of secon-

dary boycott activities was presented to sustain a jury verdict

therefor. Much of defendant’s contention rests upon the proper

legal definition of the secondary boycott alleged here. The Court

is of the opinion that its determination of these legal issues is

clearly set forth in the jury charge and that factual determinations

with regard to proof of alleged illegal activity were properly made

by the jury. Except for the question of contradiction in said

charges, the Court will not consider that issue.

68a

Considering these issues in turn, the Court concludes

as follows:

I.

The labor dispute at issue here began as a wildcat

strike and was subsequently adopted by three Teamster

locals. The defendant admits supplying strike benefits to

its members and to providing $10,000 to the depleted

treasury of one of tlie locals involved. The defendant, also

admits that one of its officers solicited help for the locals

involved from its other, non-involved affiliates. The de-

fendant with some force asserts that the above acts do

not establish the requisite agency on which to predicate

liability for illegal strike activities. The Court’s initial

inclination to sustain these contentions was, as heretofore

stated, precluded by its interpretation of the rule of In-

ternational Brotherhood of Teamsters v. United States,

supra, (hereinafter IBT“). Upon restudy of this matter

and of the IBT case, the Court concludes that IBT binds

the Court to the determination that requisite agency was

here present.

_ In that case, a criminal contempt action was brought

against the present defendant. The defendant therein

challenged the service upon an officer of a union local,

contending that said service was ineffective against the

defendant International Union. The issue thus formed

was whether the local officer was properly an agent of the

International Union. In making its determination, the

Court of Appeals for this circuit closely examined the

constitutional provisions of the defendant’s charter. Based

upon a thorough examination of the provisions of that

constitution, in an opinion by Judge Haynsworth, the

Court stated that to find that the local official was not an

agent of the parent union could not “be squared with

realism.” This conclusien was based on the parent’s far-

reaching control of the local, as shown by the provisions

of the International Constitution bearing upon such con-

trol of many details of its business and operations. The

Court further concluded that its finding was buttressed by

the fact that the local involved therein was then under

trusteeship. It appears from the Court’s reasoning, how-

ever, that the status of trusteeship was not, as defend-

ant has argued, the determinative factor in the Appellate

Court’s conclusion.

Because the Teamsters ratified a new Constitution in

July 1966, (after IBT but prior to the event complained

of here), the Court must determine whether the new pro-

visions would result in determinations in accord with

those in IBT. The provisions with regard to membership

are similar. People eligible to be local members are auto-

matically eligible to be International members. Excep-

tions to this rule may be made by the International’s Gen-

eral President. As in IBT, the International’s Constitu-

tion prescribes monthly local meetings and the rules of

procedure therefor. The General President or General

Secretary-Treasurer of the parent union has the power,

upon approval of the General Executive Board, to revoke

a local charter. Local charters are issued by the parent

union. The Trusteeship provisions are also similar. More

important, as in IBT, the International must approve

contemplated job actions by local affiliates, and has the

power to override local executive board decisions with re-

spect to acceptance of contract terms and job actions by

directly submitting the issue to a vote of the local. With-

out making further detailed findings as to the specific

operations of the International-local framework, it will

suffice for the Court to state that the two constitutions

are so similar as to bring the current set-up within the

rationale of IBT.

The Court must conclude, therefore, that as a matter

of law the jury was entitled, upon appropriate findings

of fact, to impute the actions of various locals and indi-

vidual members to the parent union.

70a

II.

The Union claims that the jury determination as to

damages is violative of the LMRA § 303, upon which the

Union’s liability is founded. The Court concludes that this

view is well taken.

The Supreme Court made clear in Local 20, Teamsters’

ete. Union v. Morton, 377 U.S. 252, 84 S.Ct. 1253, 12

L.Ed.2d 280 (1964), that § 303 is addressed only to il-

legal strike activity and that any liability predicated upon

that section must be confined to actual, compensatory

damages. Punitive damages are not within the contem-

plation of that section.“ The damages must flow from in-

juries proximately caused by the illegal secondary activi-

ties under § 303.

Upon trial, the plaintiff’s counsel in argument claimed

to have shown actual damages resulting from the second-

ary boycotts in the amount of $942,065. As the above-

recited facts indicate, the jury was well aware of this

figure. Nevertheless it returned a verdict of $1,300,000.

The Court is aware that “once the fact of damage has

been properly shown, ‘uncertainty as to their amount will

not foreclose recovery.“ Riverside Coal Co. v. U. M. W.,

410 F.2d 267 (6th Cir. 1969). The Court is also cognizant

of the fact that the protracted length of the strike here

involved (seven months) as well as the widespread geo-

graphical union strike activities make it extremely diffi-

cult to establish an exact figure for actual damages, and

that accordingly, the jury is given some latitude under

Riverside Coal. Nevertheless, the damage award here was

substantially out of touch with damages allegedly proven.

Although the plaintiff has sought to justify the award

here with further figures of subsequent business losses,

2 Punitive damages for non-peaceful secondary activity may be

awarded on a state claim under pendent jurisdiction. {ce UMW v.

Gibbs, supra. However, in this action the plaintiff failed to sustain

a state law cause of action.

71a

that evidence was not before the jury. Under Morton,

supra, this award cannot be left to stand.

The Court is of the further opinion that the jury, while

well intentioned, was in spite of the Court’s instructions

to the contra influenced in its consideration of damages

by the gross and vicious conduct attributed to the mem-

bers of the local union and their sympathizers. This is

reflected in its verdict which exceeded even the claims of

plaintiff’s persuasive advocate by more than $300,000.00.

The question remains, therefore, as to the appropriate

remedy. While there is proper precedent under § 303 for

a remittitur up to 40%, see Gulf Coast Bldg. & Const.

Tr. Council v. Hoar & Son, 370 F.2d 746 (5th Cir. 1967),

the Court concludes that in this case, owing to the com-

plicated nature of the damage question, that a remand for

new jury determination as to damages is appropriate.

See Carpenter’s Local 1273, ete. v. Hill, 398 F.2d 360

(9th Cir. 1968).

III.

The Union alleges that portions of the jury charge were

of such a contradietory nature as to be improperly con-

fusing to the jury. Specifically, it alludes to the two pas-

sages, denoted by brackets below, which deal with the

definition of the strike activities complained of. The Court

has contextualized these passages by adding intervening

portions of the charge:

[The other type of legal primary activity, strike

activity, is called roving or ambulatory picketing.

Now, this type of picketing permits the union to pic-

ket beyond the terminal, warehouse, or other build-

ings belonging to Great Coastal. It allows the union

to follow and picket Great Coastal trucks while they

make pickups and deliveries. And in this type of

picketing the union must conform to certain rules.

Briefly summarized these rules permit the union to

picket at the time when a Great Coastal truck may

72a

be located on the premises of a Great Coastal custo-

mer and is engaged in its normal trucking business

at its customer’s place of operation.

The rules permit picketing by the union providing

such picketing is reasonably close to the Great

Coastal truck and permits picketing where a Great

Coastal truck is present at the premises of a Great

Coastal customer provided the union discloses that

its dispute is only with Great Coastal and not its

customer.

Now, you heard a great deal of testimony and dis-

cussion and argument about the legality or illegality

of ambulatory picketing. About whether that picket-

ing is rendered illegal if the union hopes that the

employees of Great Coastal’s customers will honor

its picket lines. You are specifically instructed that

the ambulatory picketing is not in and of itself il-

legal. Nor is it rendered illegal by the fact that the

union may have hoped and desired that the employees

of Great Coastal’s custumers would honor the picket

lines. Ambulatory picketing, which is confined as

reasonably as possible to the vicinity of the Great

Coastal truck and to the time when the Great Coastal

truck was present on the premises is presumptively

legal.] (Emphasis supplied by defendant.)

Section 303 (a), 29 U.S.C.A. 187(a) provides, and

I quote, “It shall be unlawful, for the purpose of

this section only, in an industry or activity affecting

commerce, for any labor organization to engage in

any activity or conduct defined as an unfair labor

practice in Section 158(b) (4) of this Title.”

Section 158 (b) (4) defines an unfair labor practice

as follows: It shall be unfair labor practice for a

labor organization or its agents to engage in, or to

induce or encourage any individual employed by any

73

person engaged in commerce or in an industry affect-

ing commerce to engage in, a strike or a refusal in

the course of his employment to use, manufacture,

process, transport or otherwise handle or work on

any goods, articles, materials, or commodities or to

perform any services; or to threaten, coerce, or re-

strain any person engaged in commerce or in an

industry affecting commerce, where in either case an

object thereof is (B) forcing or requiring any person

to cease using, selling, handling, transporting, or

otherwise dealing in the products of any other pro-

ducer, processor, or manufacturer, or to cease doing

business with any other person, or forcing or requir-

ing any other employer to recognize or bargain with

a labor organization as the representative of his em-

ployees unless such labor organization has been certi-

fied as the representative of such employees under

the provisions of Section 159 of this Title: provided,

that nothing contained in this clause shall be con-

strued to make unlawful, where not otherwise un-

lawful, any primary strike or primary picketing.”

(Emphasis supplied by Court).

[The words “induce or encourage” are broad enough

to include in them every form of persuasion. Pickets

and picket signs are a form of persuasion used by

unions. And if you find that the union picketing at

places of business of the plaintiff’s customers was

intended to appeal to employees of those customers

to induce or encourage them to engage in strikes

or refusal to handle the plaintiff’s freight, and if you

further find that one of the objects thereof was

to cause such customers to cease doing business with

the plaintiff, you will answer the first issue yes.

T4a

In determining any issue involving the intent or

object of the union you may consider all the facts

and circumstances in evidence in the case which

may aid the jury in its determination of the states

of mind of the union’s representatives in this case.

The Court tells you it is not necessary that the evi-

dence in this case establish that the only object or

purpose of intent of the defendant union with respect

to the employees or persons doing business with the

plaintiff was to require or force them to cease doing

business with the plaintiff. A labor organization

may have many different reasons for communicating

or dealing with the employees of a business concern,

and all of these reasons may in varying degrees

prompt the conduct of the union with respect to

such employees. It is sufficient if one of the objects

or purposes of the defendant union in any communi-

cation or dealing with the employees of customers

or the plaintiff was to require or force such cus-

tomers to cease doing business with the plaintiff.)

The Union alleges that the two bracketed portions

cannot be reconciled. Upon proper contextualization of

these passages, the Court disagrees. The first bracketed

passage deals with the definition of primary ambulatory

picketing and states that legal primary picketing is not

rendered illegal by union members’ ultimate desires. See

Local 761 IUE v. NLRB, 366 U.S. 667, 81 S.Ct. 1285,

6 L.Ed 2d 592 (1961). The second bracketed passage is

a definitional discussion of § 303(a) which proscribes,

inter alia, secondary picketing. See Local 761, IUE, su-

pra. The two passages are uncontradictory. Any ambiv-

alence which is produced by the juxtaposition of these

passages is merely caused by the fact that, “Important

as is the distinction between legitimate ‘primary activity’

and banned ‘secondary activity’ it does not present a glar-

ingly bright line.” Local 761, IUE, supra, at 673, 81 S.Ct.

75a

at 1289. The Court is satisfied its statement of the

law as given to the jury was accurate.

The defendant takes exception as well to jury charges

on the question of damages. In light of the Court’s afore-

mentioned determination in that regard, said exceptions

are rendered moot.

The motion for judgment N.O.V. will be denied. The

Court will strike the jury award on damages and direct

a retrial solely as to that issue.

76a

APPENDIX G

UNITED STATES COURT OF APPEALS

FOURTH CIRCUIT

Nos. 73-2393, 73-2448

GREAT COASTAL EXPRESS, INC.,

Plaintiff-Appellee-Cross

* Appellant.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,

an unincorporated association,

Defendant-A ppellant-Cross

Appellee.

Argued April 3, 1974

Decided Jan. 21, 1975

Sidney Dickstein, Washington, D. C. (George Kauf-

mann, Anthony F. Troy, Ira R. Mitzner and Dickstein,

Shapiro & Morin, Washington, D. C., on brief), for

defendant-appellant in No. 73-2393 and for plaintiff-

appellee in No. 73-2448.

J. W. Alexander, Jr., Charlotte, N. C. (James M.

Minor, Jr., Richmond, Va., and John O. Pollard, Charlotte,

N. C., on brief), for plaintiff-appellee in No. 73-2393 and

for defendant-appellant in No. 73-2448.

Before RUSSELL, FIELD and WIDENER, Circuit

Judges.

WIDENER, Circuit Judge:

This suit, originally filed in a Virginia state court, was

removed to federal district court pursuant to 28 U.S.C.

TTa

§ 1441(b) as a claim arising under §§ 301 and 303 of

the Labor Management Relations Act, 29 U.S.C. §§ 185

and 187.

This appeal results from two jury trials in which the

appellant-defendant union, International Brotherhood of

Teamsters, etc. (IBT), was found to have been responsible

for damages resulting from illegal secondary boycotts

conducted by three of its local unions in violation of 29

U.S.C. § 158 (b) (4).

The employer, Great Coastal Express, Inc. (the com-

pany), contended throughout both trials that all of its

damages, alleged to be $942,065, resulted from the il-

legal acts of IBT because the company had not suffered

damage until IBT supplemented its legal tactics with il-

legal ones. The first jury returned a general verdict

against IBT for $1,300,000, which the district court set

aside on IBT’s motion for judgment non obstante vere-

dicto, or in the alternative for a new trial, as being exces-

sive. See 350 F.Supp. 1377 (E.D.Va.1972). A new trial

was ordered to reconsider the issue of damages, and the

verdict reached at the second trial was for $806,093,

upon which the district court entered judgment.

IBT contends on appeal that the court wrongfully al-

lowed the issue of whether or not the local unions, and

their officers and members, were the agents of IBT to

go to the jury in the first trial; that the company should

not recover any damages because it failed to particu-

larize its losses to those caused by illegal activity as dis-

tinguished from losses caused by legal union activity;

that the court erred in restricting the second trial to dam-

ages; and that the instructions to the second jury were

erroneous. For reasons which follow, we affirm the judg-

ment of the district court. Because of our resolution of

the case, it will not be necessary to reach the issue of the

violent conduct of the unions raised on cross appeal by

the company.

78a

The company is an interstate truck common carrier,

based in Richmond, whose business consists primarily of

transporting general commodity freight from twenty-

six Virginia counties into New Jersey and parts of New

York, Connecticut and Pennsylvania. The company had

been a party to the National Master Freight Agreement

with IBT from 1964 until expiration of the 1967 con-

tract on March 31, 1970. The parties reached an impasse

during negotiations for a new contract, and the company

refused to become a party to the new National Master

Freight Agreement. Richmond Local 592 applied for

strike benefits from IBT on August 6, 1970 and went on

strike August 9, 1970. IBT approved payment on the

strike benefits on August 10, 1970, and, on August 13,

Local 107 in Philadelphia and Local 641 in Jersey City,

New Jersey also went on strike against the company.

Retroactive strike benefit payments were also approved

by IBT for the latter two locals. All three locals were

striking over the company’s refusal to become a party to

the National Master Freight Agreement, and no conten-

tion is made that the cause for the strike was not quite

a legal reason.

The strike initially had little or no effect on the com-

pany. It was able to continue all its operations by using

office employees, salesmen, supervisors, and newly-hired

replacement drivers. Employees not on strike willingly

crossed union picket lines at Richmond, and the company

began making direct pickups and deliveries in its north-

ern territories so that the picketed Jersey City terminal

was practically unused. At the end of the seven or eight

month continuance of the strike, however, the company’s

freight-hauling business had been effectively shut off. The

argument between the parties is over the legality of a

roving picket operation, and the extent to which illegal

secondary boycott activities damaged the company.

The company’s attack in the first trial was two-pronged,

in that it sought damages for alleged secondary boycott

79

activities in violation of LMRA § 303, 29 U.S.C. § 187,

and also damages for various alleged acts of violence and

sabotage. At the close of the company’s evidence, the

court granted defendant’s motion for a directed verdict as

to the violence aspect of the case, holding that the burden

of proof for finding IBT liable for acts of violence com-

mitted is the higher standard of proof of clear and con-

vincing evidence, rather than a preponderance, and that

the company had failed to meet this higher standard. See

U.M.W. v. Gibbs, 383 U.S. 715, 735, 86 S.Ct. 1130, 16

L.Ed.2d 218 (1966), construing Norris-LaGuardia Act,

§ 6, 29 U.S.C. S 106.

We should say here, and we emphasize, that the union

does not contest the fact that there was evidence from

which a jury could find an illegal secondary boycott. In-

deed, the matter is admitted to be clearly a jury question.

And the matter having been decided in favor of the plain-

tiff under proper instructions, it is, in all events, removed

from our consideration. Lavender v. Kurn, 327 U.S. 645,

66 S.Ct. 740, 90 L.Ed. 916 (1946). The only question be-

fore us as to that finding is whether or not a partial new

trial was proper.

The company offered evidence as to illegal secondary

activities by representatives of customers it had serviced

during the strike, and drivers it had hired to replace the

strikers, as well as from its own executives and other

employees and the president of the Richmond local and

an international director of the union.

The principal witness concerning the amount of the

company’s damages was a Certified Public Accountant,

Lepp, who testified that he had worked with Great

Coastal for several years and had examined the books of

1 There is a question of some consequence as to whether or not

this argument was properly presented to the district court so that

it might be argued here. McGowan v. Gillenwater, 429 F.2d 586

(4th Cir. 1970). We do not reach this procedural question.

80a

Great Coastal for periods before, during and after the

strike. Lepp stated that he noted a disruption in the

company’s general pattern of receipts and profits after

the strike started. On the basis of the company’s business

growth pattern and operating ratio over a period of time

prior to the strike, Lepp projected a figure of anticipated

profit during the seven months of the strike as being

$322,438. He added to this the actual loss incurred by the

company during the strike, $274,895, to reach a total

damage figure of $597,333 during the strike. Lepp then

computed a projected profit figure of $495,715 for the

period from the end of the strike to the end of 1971, sub-

tracted $150,983 actual profit which the company showed

in this post-strike period, and added the additional dam-

age figure of $344,732 to $597,333 in «rriving at the total

damage estimate of $942,065.

The key witness for IBT with respect to union activity

after the strike began was Wiiliam A. Hodson, president

of the Richmond Local No. 592. Hodson testified that he

generally was in charge of the strike, and was person-

ally involved in the picketing on occasion. The union

began utilizing roving, or ambulatory, pickets to follow

company trucks to customer business locations, and Hod-

son testified that these pickets were assigned on a weekly

basis to go throughout the company’s territory. All of the

roving pickets’ expenses were paid, in addition to strike

benefit payments, by the union. Hodson testified that over

$49,000 in strike benefits were paid, and that Local 592

had also received $10,000 from IBT, $10,000 from the

Eastern Conference of IBT, and $2,500 from various

Joint Councils of IBT, apparently in addition to author-

ized strike benefits, to further assist in financing the

strike.* Hodson sent a letter to all of the company’s cus-

2 Although the matter is unclear from the evidence presented,

the $49,000 figure apparently includes all union monies, from

whatever source within the union, expended on the strike. IBT

records introduced in evidence show that it paid $24,160, as author-

ized strike benefits, to individual strikers.

81a

tomers, advising them that Local 592 was on strike

against Great Coastal because of its unfair labor prac-

tices, expressing a desire to lawfully picket on their prem-

ises when Great Coastal trucks were present, and request-

ing their cooperation during the strike. He further testi-

fied that a purpose of the roving pickets was to receive

assistance or cooperation from the company’s customers,

and that he had complained to IBT about sister Teamster

locals, not employed by the company, who refused to re-

spect their picket lines. At the first trial he admitted

that a purpose of the roving pickets was to induce em-

ployees of Great Coastal customers not to unload Great

Coastal freight, and at the second trial he admitted such

was their primary purpose. Taken as a whole, Hodson’s

testimony left little doubt that Local 592 tried to get all

IBT local unions, whether they represented Great Coastal

employees at other locations or not, to assist in this strike

in refusing to unload Great Coastal freight, and that non-

teamster unions had also been asked to help.

Evidence, in addition to Hodson’s testimony, indicated

that Local 592 kept close contact during the strike with

both the Eastern Conference of IBT and IBT headquar-

ters itself, and that almost all of Local 592’s requests for

assistance, financial or otherwise, were complied with.

IBT was advised on numerous occasions of the existence

of the roving pickets. On one occasion, Eastern Confer-

ence director and IBT director and vice president Trero-

tola wrote to over 100 other teamster locals advising

them that the roving pickets had not been entirely suc-

cessful and requested any assistance they could legally

give. He enclosed a list of Great Coastal customers.

The gist of Trerotola’s testimony as to IBT’s involve-

ment and assistance during the strike may be summarized

in short order: Trerotola stated consistently that he was

a busy man, that it was his signature on various letters

written to Local 592 and IBT, but that he did not spe-

cifically recall signing the letters because of the bulk of

82a

correspondence his office receives and the fact that he dele-

gates many responsibilities. He said the Eastern Confer-

ence may have assisted Local 592 in getting various cor-

respondence mailed and in obtaining contributions to its

strike fund; that IBT often asked other unions to help in

any way they could; and that he had requested only law-

ful assistance from other teamster locals. He said he had

no knowledge of any illegal secondary activity in con-

nection with this strike.

The district court’s opinion on the motion for judgment

non obstante veredicto following the first verdict of

$1,300,000 is reported at 350 F.Supp. 1377. IBT raised

the same issue in that motion as here with respect to

whether the company had made the requisite showing of

agency, and also argued that the jury charges were con-

tradictory, and that the jury had awarded punitive dam-

ages in violation of the Labor Management Relations Act,

§ 303. The court relied on the case of International

Brotherhood of Teamsters v. United States, 275 F.2d 610

(4th Cir. 1960), in concluding that there had been a suffi-

cient showing of agency to let the jury consider it. The

court also ruled against IBT on the jury charge issue, but

did hold that the excessive verdict of damages was par-

tially caused by the jury’s consideration of the gross and

vicious conduct attributed to the members of the local

union and their sympathizers. The court stated the dam-

age question was complicated and concluded a remittitur

was improper. The motion for judgment N.O.V. was then

denied, and a retrial ordered on the issue of damages.

At the second trial, the company relied primarily on

testimony of its president and vice-president, who testi-

fied at length concerning the deterioration of company

business and loss of customers, and Lepp’s testimony con-

cerning the $942,065 damages claimed. IBT called no wit-

nesses. Pertinent exhibits from the first trial were intro-

duced by both sides for the jury to consider in arriving

at damages. The company again took the position that

no damage had been caused until the unlawful secondary

boycott commenced. A part of the uncontradicted evi-

dence was that numbers of freight shipments went unde-

livered because of the illegal secondary boycott actions.

The jury concluded that the company had proved damages

of $806,093.

IBT’s first contention, that the court should have ruled

as a matter of law that there was insufficient evidence

for the jury to find an agency relationship between it

and the striking local unions, is without merit. The Su-

preme Court has recognized, in suits brought under the

LMRA § 303, that the responsibility of a union for the

acts of its officers and members “is to be measured by

reference to ordinary doctrines of agency.” United Mine

Workers v. Gibbs, 383 U.S. 715, 736, 86 S.Ct. 1130, 1144,

16 L.Ed.2d 218 (1966). This court has previously heid, in

another context (a criminal case with its more stringent

burden of proof), that the IBT constitution provides for

such far-reaching control of local unions that the locals,

in essence, are not autonomous but are subdivisions of

IBT. International Brotherhood of Teamsters v. United

States, supra, 275 F.2d at 614. The district court here

compared the constitution in effect when the Teamsters

case was decided, found no significant differences, and

concluded, quite correctly, that under the evidence in this

case the jury was entitled to decide the issue. 350 F.

Supp. at 1379. That being so, the issue is closed, for the

weight of the evidence and the credibility of witnesses is

solely within the province of the jury. A. & G. Stevedores

v. Ellerman Lines, 369 U.S. 355, 358-359, 82 S.Ct. 780, 7

L.Ed.2d 798 (1962); Lavender v. Kurn, 327 U.S. 645,

652-653, 66 S.Ct. 740, 90 L.Ed. 916 (1946). IBT claims

no error as to the evidence admitted, which was ample to

show participation by IBT, or in the jury charge, so the

jury’s finding of an agency relationship must stand.

The above discussion as to agency applies in large part

to the jury finding that IBT had committed illegal secon-

84a

dary acts. As stated before, the defendant admits this was

a jury question. The court, at the first trial, very care-

fully charged the jury as to the law concerning secondary

boycotts, and IBT does not contest the charge on ap-

peal. From the testimony and other evidence recited, it

goes without saying that the jury had abundant evidence

to find that IBT had induced, encouraged, threatened, or

coerced employees of Great Coastal customers to with-

hold the labor from their employers, with whom they had

no dispute, and that IPT so acted for the purpose of

achieving the unlawful objectives set out in the National

Labor Relations Act, § 8(b) (4), 29 U.S.C. § 158(b) (4).

The record also contains abundant evidence from which

the jury could have found, as it obviously did, that almost

every truck of Great Coastal was followed by roving

pickets from the inception of the strike; that initially they

were to little or no avail; that after requests of Trerotola

and Hodson were made to the other unions the roving

pickets became almost completely effective because the em-

ployees of the consignees would not accept delivery from

Great Coastal; and on account of the illegal secondary

boycott activities Great Coastal was damaged.

The thrust of IBT’s complaint concerning the second

trial, though, is not the sufficiency of the evidence, but

that the company should have separated union activity

that was clearly lawful, and for which no damages could

be had, from the alleged unlawful activities, and thus

established the proximate cause of its damages with more

specificity. The company’s theory throughout both trials

was that it had suffered no damages at issue here because

of lawful union activity, but that all of such damages

resulted from IBT’s unlawful acts which ultimately shut

down business entireiy.

What IBT does not take into account is that at the

second trial, the trial judge, out of an abundance of pre-

caution, submitted not only the amount of damages, but

also the proximate cause thereof to the jury. Thus, there

were the two issues tried at the second trial, not only

the issue of the amount of damages.

The judge again correctly charged the jury which am-

bulatory picketing activities were lawful, and which were

unlawful, and, among several references to proximate

cause in his charge which required the company to prove

its damages were proximately caused by the unlawful

activities of the union as contrasted to the lawful, told the

jury:

“You understand, of course, that you may not award

the plaintiff damages simply because of lost money

during the strike or for money lost as a result of the

union engaging in legal and permitted activity. In

a strike situation, infliction of losses both upon the

union and the emplover is *~ he expected. It is not

an occasion for liability u... the losses resulted

from illegal strike activity. For this reason, you may

only award damages where Great Coastal has proved

by a preponderance of the evidence that it was so

We think this case is not one where the plaintiff

should be faulted out of its judgment for not proving its

damages with more exactness and precision. The Supreme

Court has held, in an anti-trust case, that where the

amount of damages cannot be ascertained with certainty,

“it would be a perversion of fundamental principles of

justice to deny all relief to the injured person, and thereby

relieve the wrongdoer from making any amend for his

acts.” Story Parchment Co. v. Paterson Parchment Co.,

282 U.S. 555, 563, 51 S.Ct. 248, 250, 75 L.Ed. 544

(1931). This circuit has previously adopted the Story

Parchment reasoning in an action under 29 U.S.C. § 187

very similar to the one at hand. United Mine Workers v.

Patton, 211 F.2d 742 (4th Cir. 1954). IBT’s contention

that Local 20, Teamsters Union v. Morton, 377 U.S.

252, 84 S.Ct. 1253, 12 L.Ed.2d 280 (1964), would

mandate a contrary result is not well founded, for

Morton was a completely different case. In Morton, the

district court, sitting without a jury, awarded the plain-

tiff $9,000 damages, under state law as a pendent claim,

for loss of one of its customers, as a part of plaintiff’s

total damages. The customer had been persuaded by the

union to cease doing business with the plaintiff, but its

employees had not been approached. The Supreme Court

held that the district court had no power to award

damages proximately caused by such lawful, primary ac-

tivities, since permitted by federal law, even though state

law would have allowed a recovery in such a case. 377

U.S. at 259-260, 84 S.Ct. 1253. Along the same line, the

court set aside the judgment for loss of certain customers

whose business had been discouraged because of the strike,

but who were not affected by any unlawful activity, be-

cause the union should not be responsible for damage

by lawful activity even though it may have been engaged

in unlawful activity elsewhere. 377 U.S. at 261-262, 84

S. Ct. 1253. But the court sustained the judgment of the

trial court for damages for unlawful secondary boycott

activities, the district court having in its opinion sepa-

rated the items of damage.

In this regard, IBT argues that the court should have

required a special verdict from the jury. F.R.Civ.P. 49

gives district courts broad discretion in determining the

form of verdict. While we have no occasion here to de-

cide whether the district judge has uncontrolled discretion

in this regard,“ we do note that there apparently has

never been a reversal for abuse of discretion in deter-

mining the form of verdict. We hold, with Toth v.

Corning Glass Works, 411 F.2d 912, 914, n. 2 (6th Cir.

1969), that where the complaining party made no request

See Skidmore v. Baltimore & Ohio RR., 167 F.2d 54, 66-67 (2nd

Cir. 1948), cert. den., 335 U.S. 816, 68 S.Ct. 34, 93 L.Ed. 371 (1948).

*9 Wright and Miller, Federal Practice and Procedure, Civil,

§ 2505, p. 492, 5A Moore’s Federal Practice, 2d Ed., 1974, f 49.03(1),

p. 2208.

87a

for a special verdict to the trial court, it cannot raise the

issue for the first time on appeal. Since IBT acceded to

the general verdict without complaint in both trials in the

court below, it may not now assign error in the district

court’s submission of the issues by way of general

verdict.

Turning now to the issue of whether a partial new

trial was appropriate, we note that such is expressly

permitted by F.R.Civ.P. 59(a). The principal case with

respect to ordering a new trial as to damages only is

Gasoline Products Co. v. Champlin Co., 283 U.S. 494, 51

S. Ct. 513, 75 L.Ed. 1188 (1931). The court, in Gasoline

Products, held “that, where the requirement of a jury has

been satisfied by a verdict according to law upon one issue

of fact, that requirement does not compel a new trial of

that issue even though another and separable issue must

be tried again.” 283 U.S. at 499, 51 S.Ct. at 515. The

court then proceeded to analyze the contra in dispute

to determine whether the damages and liability issues

were separable, and concluded that, although the verdict

on the contract sued upon by the plaintiff was affirmed,

since the first verdict on the counterclaim was for less

than the total damages claimed on various contracts, the

extent of the damages depended on the extent of the

undertakings which were in dispute, and the issues were

so interwoven that a second jury could not fairly consider

damages alone in a new trial on the counterclaim. And,

it is noteworthy that the court did separate and let

stand the verdict for the plaintiff on the contract sued

upon without a new trial.

This court has considered new trials limited to dam-

ages on severai occasions since the Gasoline Products

case. It is well settled that granting or denying a new

trial, either for excessiveness or inadequateness of the

verdict, is discretionary with the trial court, and not

reviewable absent a showing of abuse of discretion. Young

v. International Paper Co., 322 F.2d 820, 822 (4th Cir.

88a

1963). Most of the cases considered by this court have

concerned the district court’s discretion in ordering a

partial new trial for inadequate damages, but the same

general principles apply whether the verdict is attacked

either for inadequacy or excessiveness. DeFoe v. Duhl,

286 F.2d 205 (4th Cir. 1961) (citing Virginia law) ;

see Note, 29 A.L.R.2d 1202 (on inadequacy). The only

case where a new trial on all issues was suggested be-

cause of excessive damages was United Construction

Workers v. Haislip Baking Co., 223 F.2d 872 (4th Cir.

1955), cert. den., 350 U.S. 847, 76 S.Ct. 87, 100 L.Ed.

754 (1955).

In Haislip Baking, an action based on 29 U.S.C.

§ 185(b), it is true the court stated that It] he verdict

on the first trial was so excessive and so manifestly based

on improper consideration, instead of upon the record,

that it should have been set aside in its entirety and a

complete new trial ordered,” but the court then pro-

ceeded to direct entry of judgment for the defendant

instead of remanding for a new trial. The jury in that

case had erroneously not been instructed on mitigation

of damages and had erroneously been allowed to consider

the parent union as responsible for a wildcat strike. It

was this latter consideration the court referred to in its

reference to the record. Neither consideration is present

here, and even considering the above quoted statement

from Haislip as a holding, it does not control the disposi-

tion of this case.

In another Fourth Circuit case involving excessive

damages, the trial court ordered a remittitur instead of

a partial new trial. Ford Motor Co. v. Mahone, 205 F.2d

267 (4th Cir. 1953). This court reversed and ordered a

new trial as to all the issues when it was found that one

of the jurors had obvious partisan bias in favor of one

of the parties, and this in a “hotly contested” trial as to

both liability and damages which resulted in a verdict

the court found based on pity and sympathy. Likewise,

that problem is not presented in this case.

This court has noted that there is “always a presump-

tion in favor of the validity of a verdict if it is the result

of honest judgment,” City of Richmond v. Atlantic Co.,

273 F.2d 902, 916 (4th Cir. 1960), but has found a new

trial on all issues to be required where a totally inade-

quate verdict was rendered which could only have been

a sympathy or compromise verdict. Southern Railway v.

Madden, 235 F.2d 198 (4th Cir. 1956), cert. den., 352

U.S. 953, 77 S. Ct. 328, 1 L.Ed.2d 244 (1956). But where

there is no substantial indication that the liability and

damage issues are inextricably interwoven, or that the

first jury verdict was the result of a compromise of

the liability and damage questions, a second trial lim-

ited to damages is entirely proper. Young v. Interna-

tional Paper Co., supra; Mason v. Mathiasen Tanker

Industries, Inc., 298 F.2d 28 (4th Cir. 1962), cert. den.

371 U.S. 828, 83 S.Ct. 23, 9 L.Ed.2d 66 (1962).

The matter of a partial new trial has been f . quently

considered since Gasoline Products and its subsequent

articulation in F. R. Civ. P. 59 (a), and one of the leading

texts states that it “may be regarded as settled that if

an error at the trial requires a new trial on one issue, but

this issue is separate from the other issue in

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