# Opposition Brief — Hallco Manufacturing Co. v. Foster

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1995
- **Citation:** 513 U.S. 1080

## Text

No. 94-792

IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1994

~ HALLCO MANUFACTURING. CO.. INC.
and OLOF A. HALLSTROM. Petitioners.

RAYMOND KEITH FOSTER, KEITH MFG. CO..,
INC. and KEITH SALES CO., Respondents.

On Petition for a Writ of Certiorari
to the United States Court of Appeals
for the Federal Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

Delbert J. Barnard

Counsel of Record

Glenn D. Bellamy

BARNARD PAULY & BELLAMY P.S.
P.O. Box 58888

Seattle, WA 98138-1888

(206) 246-0568

Counsel for Respondents

November 30, 1994

c- —

i
QUESTIONS PRESENTED

Respondents (collectively "Foster") object to the questions
presented for review by Petitioners (collectively "Hallco") for
the reason that the questions are not supported by the record.
Foster believes that the questions should be as follows:

1. Whether a party requesting relief from judgment
under Rule 60(b), based on alleged fraud or other misconduct
of an adverse party, must prove the alleged fraud or other
misconduct by clear and convincing evidence?

2. Whether, with respect to a jury verdict that a party
"tried to willfully mislead the court and jury", based on an
interrogatory that did not include a "clear and convincing"
standard of proof, it is an abuse of discretion for a trial court
to hold that "the court cannot conclude that the jury made
this finding by clear and convincing evidence" and further
hold that the party alleging fraud has not shown by "clear
and convincing" evidence that the adverse party had
"willfully attempted to mislead the court and the jury"?

3. Whether a party whose patent is found to be invalid
for failure to disclose the "best mode" can seek a new trial
under Rule 60(b), limited to the "best mode" issue, based on
alleged fraud or misconduct of the adverse party with respect
to a trial exhibit having no relationship to the "best mode"
issue, without demonstrating that such party has a substantial
"best mode" case to present?

LIST OF ALL PARTIES

All parties to the proceeding are identified in the caption.
Pursuant to Supreme Court Rule 29.1, petitioners state there
are no parent or subsidiary companies to be listed.

iii

TABLE OF CONTENTS

QUESTIONS PRESENTED................___ i
eee PARTIES... 6... ss. li
timer CONTENTS...................... ili
TABLE OF AUTHORITIES ..............._. vi
I. STATEMENT OF THECASE ............___ l
I oe ooo ee. l

B. OMITTED MATERIAL _ te are ae ae l
SS 2

2. The Wilkens 1973 Trailer..........__. 6

3. Keith’s 1991 Affidavit. ........... 9
acces .s........... 10

5. Foster’s Trial Strategy........... 13

6. Hallco’s Trial A a 14

C BRSSTATEMENTS ................_. 16

l. No Prima Facie a ae 17
Ne eee 17

3. The "Shiny" Metal ............ 17

4. The "Milled Out" Portion ........__. 18

5. Sam Windsor’s DPS Ss ic 18

6. Alleged Misconduct ............__. 18

7. Interrogatory No.17............__. 18

8. Integrity Of The Judicial Tot ke 18

iv

II. SUMMARY OF ARGUMENT .............

[. AIRGAS 3 «8 840 Niis eR

A.

THERE ARE NO LEGAL ISSUES NEEDING
REF: 66454 bese hws os

FRAUD OR OTHER MISCONDUCT MUST BE
ESTABLISHED BY CLEAR AND
CONVINCING EVIDENCE . 0.02. ccce0.

IT WAS NOT AN ABUSE OF DISCRETION
FOR THE TRIAL COURT TO RULE THAT IT

COULD NOT CONCLUDE THAT THE JURY |

HAD FOUND THAT FOSTER "TRIED TO
WILLFULLY MISLEAD THE COURT AND
JURY" BY "CLEAR AND CONVINCING"
CVE he ie ee EE aes

IT WAS NOT AN ABUSE OF DISCRETION
FOR THE TRIAL COURT TO RULE THAT
HALLCO HAD NOT SHOWN BY "CLEAR
AND CONVINCING" EVIDENCE THAT
FOSTER HAD "WILLFULLY ATTEMPTED
TO MISLEAD THE COURT AND JURY" ..

IT WAS NOT AN ABUSE OF DISCRETION
FOR THE DISTRICT COURT TO RULE THAT
"THE TRIAL TACTICS AND STRATEGY OF
FOSTER DID NOT DENY HALLCO AN
OPPORTUNITY TO FULLY AND FAIRLY
PRESENT ITS CASE OR DEFENSES" ....

20

21

22

24

25

v

F. IN MAKING ITS RULINGS, THE TRIAL
COURT DID NOT IGNORE BUT RATHER
GAVE PROPER WEIGHT TO THE JURY’S
"YES" ANSWER TO INTERROGATORY NO.

G. HALLCO HAS NOT SHOWN THAT IT HAS A
“Sek Magee CARE So at CLE ie 27

SY: CAAA. ees Ee AAS 29

vi

TABLE OF AUTHORITIES

CASES

Addington v. Texas,
is hs ws wink 0.0 0 6 We ce aie 22

Amstar Corp. v. Envirotech Corp.,
Boo Bue be Cre. Ce. FFE) ow we ccc een 21

Atchinson v. Barrett,
SOR Fe ee ee GE, FRGT) nc icc ewcles 24-26
Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd.,
ae EE fib 5 blk noe OES BO ON 23

Bunch v. United States,
ge Bo eT +) re 21

Gallick v. Baltimore & Ohio R.R.,
ee es iis a kes bao On 23

In re M/V Peacock,
809 F.2d 1403 (9th Cir. 1987) ........... 21, 26

Jones v. Aero/Chem. Corp.,
921 Foe Bro Come Cee. 1990). gw oe ce cee 21

Richardson v. Suzuki Motor Co.,
868 F.2d 1226 (Fed. Cir. 1989).
« ot ow oan see Gb eeitn oh bolas 68 eee 23
Riley Hill General Contractors Inc. v. Tandy Corporation
303 Ove. 390; 737 P26 SOS (19ST) onc k ce ce es 21
Toner v. Lederle Laboratorie
828 F.2d 510 (9th Cir. 1987), cert. denied,
108 S.Ct. 1122 (1988) ..... POLS ee 23, 27

vii

RULES

Fe a oe kk so ove ove a i, 2, 19, 20, 26
> a re ae ll
OTHER

Restatements, Second, Judgments §70 ............ 28

ee

BO og re

=

A ee ee te
Sete. vege

1
I. STATEMENT OF THE CASE

A. OVERVIEW

Hallco has in its Petition both misstated and understated
the district court record. In Hallco’s "Questions Presented,"
the statements "there is uncontroverted prima facie evidence
that an adverse party willfully altered a key trial exhibit,"
"such misconduct affected the trial" and the "trial court
[gave] no weight to a jury verdict that an adverse party
willfully altered a key trial exhibit in an attempt to mislead
the court and jury" are not supported by the record. In its
Petition, Hallco makes no mention of the jury’s finding that
Foster proved "by clear and convincing evidence that the
1973 drive mechanism in the Wilkens 45-foot trailer move[d]
the slats in a 1-2-3 motion." References herein to "A" are to
the Joint Appendix of the present action on appeal before the
Court of Appeals for the Federal Circuit.

B. OMITTED MATERIAL FACTS

Following a five-week trial held in October and
November of 1992, a jury returned a verdict which included
"yes" answers to Interrogatories Nos. 13 and 15 which read:

Interrogatory No. 13: Did Foster prove by clear and
convincing evidence that Hallstrom failed to disclose the

best mode known to him when he filed the application
which became the ’760 patent, as to either claim 1 or
claim 4 of the ’760 patent? (A 1247)

Interrogatory No. 15: Did Foster prove by clear and
convincing evidence that the 1973 drive mechanism in

2

the Wilkens 45-foot trailer moved the slats in a 1-2-3
motion, and included a one-way mechanical coupling, in
the form of pull blocks on the push rods, for insuring

simultaneous movement of all slats in the conveying
direction? (A 1249)

and a "no" answer to Interrogatory No. 16 and a "yes"
answer to Interrogatory No. 17 which read:

Interrogatory No. 16: Do you find that Foster tried to
mislead the court in his 1991 affidavit, Defendant’s
exhibit 671, with respect to the 1973 45-foot Wilkens
drive unit? (A 1250)

Interrogatory No. 17: Do you find that Foster tried to
willfully mislead the court and jury with respect to the
drive unit, identified as plaintiff's exhibit 162, the drive
unit which Foster contends represents the 1973 45-foot
Wilkens drive unit? (A 1251)

The "yes" answer to Interrogatory No. 17 is what promoted

Hallco to file a motion for relief from judgment under Rule
60(b).

1. Best Mode. Foster’s "Best Mode" evidence was
for the most part the testimony of the patentee Olof A.
Hallstrom ("Hallstrom"). With respect to the "drive means"
disclosed in the ’760 patent, Hallstrom testified:

If I would consider this to be a machine drawing, a
drawing for production as opposed to a schematic
drawing, I would not do it this way, no. (A 1443)

* * * * *
The illustration of pin 30 there is simply a means of
connecting. It’s simply one of many means of

3

connecting. In actual practice, I believe most of these are
connected rigidly by one means or another. (A 1446)

Hallstrom testified that in actual practice the system
included a "push rod" about which he stated:

It is an extending arm which serves a dual purpose. It
helps to resist rotational forces upon the transverse drive
beam. It also provides for the placement [sic] of
abutment[s]. (A 1447)

In further regard to the disclosed pivot pin connections,
Hallstrom testified:

In actual practice a pivot pin was not used there. (A
1449)

[T]here was no point in it being pivotal. In fact, it would
be detrimental. Therefore, the connection was more of
a rigid nature. (A 1449)

[I]t’s desirable to reduce the tendency of the crossdrive
to roll... by having some of the rolling effect taken up
through a push rod and not being supported only by the
deck. (A 1450)

The ’760 patent includes the statements:

Another important object of this invention is to provide
a reciprocating conveyor of the class described in which
the fluid pressure drive system is formed of commercially
available components and therefore is of minimum cost.
(A 657)

* * * * *

—_—--

4

Moreover, the conveyor includes a fluid pressure drive
system composed of commercially available components.
The cost of manufacture, maintenance and repair thus is
reduced to a minimum. (A 660)

At trial, Hallstrom testified that the hydraulic cylinders
with check valves built into them, disclosed only
schematically in the ’760 patent, were not commercially
available. (A 1457-58) He further testified that it took him
a substantial time to develop a suitable check valve. (A 1458)

Prior to the filing of the ’760 application, Hallstrom
started using a hydraulic switching valve known as the Dupar
Dynamics "Walton" or "Rothrock" valve. (A 623-27, 670,
1636-43) This switching valve was not disclosed in the ’760
patent, but instead an air system valve was disclosed. With
respect to the air system valve, Hallstrom testified:

It worked up to the point that the operators would keep
their air systems to the trailer working properly. But if
there was not air pressure available then the system left
a little to be desired. (A 1454)

*_ * & *& *
There is also [a] question in my mind of the possibility
of an air leak developing in the system which could take
the air away from the air brakes of the vehicle and J got
concerned over the possibility of liability in the event
that brakes should fail. (A 1455)

Hallstrom was asked and he answered:
Q_ And so what did you do in response to that concern?

A We made this valving totally hydraulic so it operated
off of the oil hydraulic system.

5

Q Now, that’s a reference to the use of the Dupar
Dynamics valve which has also been referred to as
the Walton valve or the Rothrock valve?

A Yes (A 1455-56)
Hallstrom further stated:

The Rothrock valve was an internally hydraulical[ly]
activated valve which caused it to operate a little like a
wall switch that, [being] it’s one way or the other way;
and it’s a very desirable type of valve for our
application. (A 670)

Lee H. Jones, a Hallco dealer, testified that the air control
valves never worked and had to be replaced by the "hydraulic
switching valve", i.e. "a mechanical switching device that’s
all done in oil." (A 1259-63, 1433-36) Mr. Jones referred to
the hydraulic switching valve as "one great improvement." (A
1437)

In December of 1974, prior to the filing of the ’760
application in January of 1975, Hallstrom wrote a letter to a
prospective customer in which he stated:

We have now completed the major part of our R and D
and will soon be ready to market our product.

There are presently twenty (20) units working in a wide
variety of materials under all types of weather conditions,
From this experience we have developed a closed
hydraulic system free of external controls (electric, etc.).
( A 1674)

6

Based on this evidence, the jury found that Hallstrom had
not disclosed the "best mode". (A 476) Hallstrom did not
appeal the district court’s holding that claims 1 and 4 were
invalid for failure to disclose the best mode. There is no
connection between the "best mode” issue and PX 162, the
drive unit referred to in Interrogatory No. 17.

2. The Wilkens 1973 Trailer. At trial, four people
testified that in 1973 the drive mechanism in the Wilkens 45-
foot trailer moved the slats in a 1-2-3 motion and included a
one-way mechanical coupling in the form of pull blocks on
the push rods for insuring simultaneously movements of all
slats in the conveying direction. These people were
respondent Raymond Keith Foster ("Keith"), Art Wilkens,
Chuck Wilkens and Darryl Oakley.

Keith and Art Wilkens testified that prior to acquiring the
45-foot trailer, Art Wilkens had purchased from Keith a truck
which included an "inch" system conveyor. (A 1503, 1310-
11) Based on his experience with the "inch" conveyor, Art
Wilkens requested that the trailer be furnished with a longer
stroke conveyor. (A 1312-13) Keith passed this request on
to Hallstrom who then delivered the 1-2-3 drive unit (PX
162) to Keith. (A 1502-03) Keith installed the drive unit in
the trailer. Darryl Oakley, a South Dakota trucker, testified
that he was hired by Art Wilkens to pick up the trailer and
deliver it to Art Wilkens in Kansas. (A 1313) Darryl Oakley
first took the trailer to his home in South Dakota and used it
thirty-seven times before delivering it to Art Wilkens. (A
1398) During cross-examination Hallco’s attorney suggested
to Darryl Oakley that the conveyor was an "inch" system
conveyor. (A 1412-13) Darryl Oakley answered that he
knew nothing about the "inch" system conveyor; he was only
familiar with the 1-2-3 motion conveyor. (A 1413) Art
Wilkens and his son Chuck Wilkens testified that they both

7

used the trailer. (A 1316, 1370) After a while, they
experienced trouble caused by electrical control components
getting dirty. (A 1316) At times they had to manually
operate the control system. (A 1317-18, 1371-72) They did
this by detaching wires and tapping them on the trailer frame
to make the system operate. (A 1316-18, 1371-72) At trial,
Art Wilkens demonstrated this procedure with PX 162. (A
1333-35)

Keith testified that because of the problems experienced
by Art and Chuck Wilkens with the electrical control system,
he sought to develop a mechanical/hydraulic control system
that would duplicate the 1-2-3 motion. (A 1540-42) In the
latter part of 1973, Keith had Dupar Dynamics design for
him two mechanical/hydraulic systems for powering a
reciprocating slat conveyor, one in a 1-2-3 and the other in
a 1-2-3-4 motion. (A 561, 572, 1540-42) In early 1974,
Keith obtained a 1-2-3-4 system design from Paul Monroe,
a hydraulic design shop located in California. (A 1542) In
March of 1974, Keith bought a 1-2-3-4 contro! system from
Dupar Dynamics and installed it in a trailer which he had
built for the Three-Way Cattle Company. (A 382, 564-69,
1540-41) This system did not work properly. (A 1541) In
April of 1974, Foster made and installed a working drive
system that is presently in the Three-Way Cattle Company
trailer. (A 1541-52) At trial, Don Tonnagel and Richard
Lawson of Dupar Dynamics testified about their helping
Keith develop a mechanical/hydraulic control for 1-2-3 and
1-2-3-4 conveyors, starting in late 1973. (A 1290-1300, 1300-
04) Their testimony was supported by drawings of these
systems and purchase records of hydraulic components by
Keith from Dupar Dynamics. (A 559-72) A drawing of the
Paul Monroe 1-2-3-4 system design was also introduced at
trial. (A 573)

Regarding PX 162, during trial Keith was asked and he
answered:

Q

Q

A

Mr. Foster, with respect to this Exhibit 162 that
you ve been looking at. Did you make any. changes
in substance to the mechanism that causes the one,
two, three operation to occur?

No.

The changes were making cylinders unstick or
warped cylinders work and that sort of thing?

Stuck valves to become unstuck and limit switches
had to make contact where they were corroded.

You made reference to a Model T. If you were to in
1992 find an old Model T that had been sitting
around, would you have to do some cleaning up and
things with it to get it to work so you could show
someone how it works?

Yes, we would. In fact I did that many years ago.

That’s in effect what you did with this drive in front
of us?

That’s right. (A 1601-02)

Based on this evidence, the jury answered "yes" to
Interrogatory No. 15., i.e. found that Foster had proved by
clear and convincing evidence that the 1973 drive mechanism
in the Wilkens 45-foot trailer moved the slats in a 1-2-3
motion, etc. (A 1249, 523)

9

3. Keith’s 1991 Affidavit. In August of 1991,
Foster filed a motion for summary judgment in which he
contended inter alia that, "If claims 1 and 4 are construed
broadly enough to embrace the RF II conveyor, they would
also embrace the Wilkens ’73 trailer and thus be invalid."
This motion was supported by an affidavit from Keith in
which he described the 1-2-3 mode of operation of the
conveyor in the Wilkens trailer and made reference to
photographs and drawings of PX 162. (A 1675-93) Keith’s
affidavit was corroborated by affidavits from Art Wilkens,
Chuck Wilkens and Darryl Oakley. (A 1694-1702, 1714-16)
The district court found that there were questions of material
fact and for this reason denied the motion.

With respect to Keith’s affidavit, at trial Hallco’s attorney
questioned Keith and he answered:

Q Okay. So when you say Exhibit L, M, N, O, P are
photographs of the 1973 drive mechanism for the
conveyor in the Wilkens ’73 trailer, you were
referring to this drive mechanism, correct?

A That’s what I - - we thought so when we wrote this
up.

Q Okay. And you didn’t say anything in this [affidavit]
and you didn’t say anything until yesterday about the
fact that this was more or less an assemblage of parts
from other prior units?

A At one point, we started here with - - we had five
model T’s out in the back. We had to make some of
them run. And so the parts - - or some of them were
wrong on one and some wrong on another. I thought

10

we did a marvelous job of getting two of them to
run.

Q You did a marvelous job of getting one of them to
run in the one, two, three motion, but you never told
the Court and you never told anyone until yesterday
that this wasn’t the same unit, did you?

A It’s basically the same unit. Now, I told you there
was a mistake made by some of our men that they
lost some of the parts. At one time we took them
and cleaned. I told them to clean them up and steam
clean them, and some of the parts were lost. (A
1599-1600)

During redirect Keith was asked and he answered:

Q Now, the substance of your affidavit that you made,
the affidavit you’ve been questioned about, is that in
substance correct?

A The substance is correct. I’m not sure everything
about it is perfect, but in substance it’s correct. (A
1602)

Based on the testimony of Keith and the corroborating
testimony of Art Wilkens, Chuck Wilkens, Darryl Oakley,
Don Tonnagel and Richard Lawson, and the corroborating
exhibits, the jury answered "no" to Interrogatory No. 16, i.e.,
found that Foster did not try to mislead the court in his 1991
affidavit with respect to the 1973 45-foot Wilkens drive unit.
(A 1250, 523)

4. PX 162. Foster sought and obtained the court’s
permission to demonstrate PX 162 and some other prior art

11

devices to the court and jury. The demonstrations were held
in a rented building that was several blocks from the
courthouse. The time allotted for the demonstrations was
limited. Therefore, Foster first presented the testimony of
Art Wilkens who testified with respect to PX 162 and another
exhibit and demonstrated PX 162. (A 1324-35) Art Wilkens
also demonstrated how back in 1973 he detached a pair of
control wires and tapped them on the trailer frame to make
the drive unit work. (A 1333-34) Near the end of the day,
the district court judge requested that the parties finish taking
testimony in the courtroom. (A 1357-59) In response,
Hallco’s attorney asked the court for permission to ask Keith
some questions regarding PX 162 and another exhibit before
returning to the courtroom. (A 1358-59) The district court
granted his request. (A 1358) Thus, Keith was in effect
cross-examined with respect to PX 162 before he presented
direct testimony regarding these exhibits. It was during this
examination that Keith first testified that PX 162 had to be
restored in order to make it work. (A 1360-65) Later during
examination by his own attorney, Keith was asked and he
answered:

Q Yesterday you had some cross-examination in effect
on this before you had any direct questioning - - .

A Okay.

Q_ --about it. And it’s correct that it’s your testimony
that this unit or [a] unit basically similar, something
that had the working parts but maybe different
cylinder parts, was in that 1973 Wilkens trailer when
it was picked up by Mr. Oakley?

A Yes, sir. (A 1513)

CN EC a SURE ee STE ee

ee bey Oren. hh OF Ades ae ei bd te ee,

12

During questioning by Hallco’s attorney, Keith testified
that in order to make PX 162 work his workmen had to take
the drive unit apart and clean it and had to replace some of
the electrical components and a warped cylinder. (A 1360-65,
1601-02) The replacement cylinder was identical to the
original cylinder and it came from an old "inch" system drive
unit. (A 1506-09) Keith also testified that one of his
workmen reassembled PX 162 with angle iron base members
from one of the other drive units and the original base
members were lost. (A 1361-62) These base members were
identical to the original base members except for the
placement of some mounting holes. As previously stated,
Keith was asked by Foster’s attorney and he answered:

Q Mr. Foster, with respect to this Exhibit 162 that
you’ve been looking at. Did you make any changes
in substance to the mechanism that causes the one,
two, three operation to occur?

A No. (A 1601)

It has always been Keith’s position that when he obtained
PX 162 from Hallstrom back in 1973, it came with the 1-2-3
mode of operation. If PX 162 was changed from an "inch"
motion to a 1-2-3 motion, it was done by Hallstrom back in
1973.

As its last witness on the last day for taking testimony,
Hallco presented Hallstrom to testify with respect to PX 162.
(A 1083-1101) Hallstrom pointed out to the jury that a cam
plate had been removed from a control bar in PX 162 and
there was "shiny" metal where the cam plate had once been
attached. Hallstrom also made reference to a "milled out"
region in a guide member in PX 162. (A 1092-93) Hallstrom
suggested that this member belonged on DX 673, an "inch"

13

system drive unit and that a like member on DX 673 which
did not include a "milled out" portion belonged on PX 162.
(A 1091-92) Hallstrom did not say that he had actual
knowledge that Keith or someone else associated with Foster
had removed the cam from the control rod.

With respect to the main issue regarding PX 162, viz.
what was its mode of operation in 1973, the jury did not
. believe Hallstrom; it instead believed Keith. (A 1249, 523)
The jury found that Foster had by "clear and convincing
evidence established that the 1973 drive mechanism in the
Wilkens 45-foot trailer moved the slats in a 1-2-3 motion"
(Interrogatory No. 15). (A 1249, 523) The jury believed
Keith’s 1991 affidavit testimony that the slats in the Wilkens
trailer had a 1-2-3 motion in 1973 (Interrogatory No. 16). (A
1250, 523)

5. Foster’s Trial Strategy. Foster’s trial strategy
was to inform Hallco early as to the witnesses and exhibits
Foster would be using at trial with respect to all of the issues.
This was done in order to determine which issues would be
in dispute well before trial. Foster first put Hallco on notice
that Foster was going to be relying on PX 162 and the
testimony of Keith, Art Wilkens, Chuck Wilkens and Darry]
Oakley, back in August of 1991, when Foster filed its motion
for summary judgment. (A 27, items 271-73) In the Pretrial
Order, Foster defended Hallco’s charge of infringement by
contending inter alia:

(3) Claim 1 is invalid, if construed broadly enough to
cover the RF II conveyor because it would then also
embrace the prior art Marion conveyor that was
demonstrated in the January 1974 show, the prior art 45-
foot conveyor sold to Wilkens in 1973, the prior art
conveyor that was delivered by FOSTER to the Three-

Per Se

14

Way Cattle Co. in April of 1974, and the prior art
conveyor that was delivered by FOSTER to Howard Hay
Co. in April of 1974.

* * a * *

(6) Claim 4, if construed broadly enough to cover the
RF II conveyor, would be invalid because it would then
also embrace the prior art 45-foot conveyor sold to
Wilkens in 1973, the prior art Three-Way Cattle Co.
conveyor that was delivered by FOSTER to the Three-
Way Cattle Co. in April of 1974, and the prior art
conveyor that was delivered by FOSTER to Howard Hay
Co. in May of 1974.

(7) Claims 1 and 4 are invalid, if construed broadly
enough to cover the original conveyor sold to IMCO and
leased to Oakley in July of 1974, the prior art 45-foot
conveyor sold to Wilkens in 1973, and/or the replacement
conveyor that was built in 1974 and furnished to Oakley
in November or December of 1974, because
HALLSTROM would have failed to disclose the best
mode know to him at the time he filed the patent
application in January of 1975. (A 42, item 422)

6. Hallco’s Trial Strategy. In the Pretrial Order,
Hallco’s sole contentions regarding validity of the ’760 patent
were:

(2) The *760 patent is presumed valid, so Hallco
needs to make no showing as to validity or
enforceability. However, Foster is barred by the 1982
settlement from asserting invalidity or unenforceability.

(3) In the event Foster asserts invalidity of the ’760
patent, Hallstrom’s conception of the invention preceded
alleged prior art Foster is contending invalidates the 760
patent. (A 42, item 422)

15

In June of 1992, Hallstrom and Hallco’s attorney went to
Foster’s plant in Madras, Oregon and witnessed a
demonstration of PX 162 and two other drive units. (A 1619)

However, between August of 1991 and the start of trial
Hallco did not depose Keith, Art Wilkens, Chuck Wilkens or
Darryl Oakley, or take any other discovery with respect to
PX 162 or the Wilkens trailer.

During the last week of trial, Hallco’s attorney initiated
several discussions with the court with respect to the division
of the remaining testimony time between the parties. His
main concern was that he have the last two hours of time on
the last day of taking testimony in which to present final
rebuttal testimony. (A 1531) He did not at any time inform
the court that he needed additional time and he did not ask
for a continuance. To the contrary, he told the court, "I think
we’re moving along real well now." (A 1488) On the last
day of trial he stated to Foster’s attorney, "Why don’t you
have an extra half hour this afternoon . . . as long as I have
after 2 o’clock." (A 1531)

As previously stated, during the last two hours on the last
day for taking testimony, Hallco presented Hallstrom as a
witness with respect to PX 162. (A 1083-1101) During his
testimony Hallstrom made allegations that someone had
altered PX 162. Hallco’s attorney has since contended that
the alterations were the product of fraud or misconduct by
Keith.

On that last day of taking testimony, Hallstrom testified
that in June of 1992 he saw the "shiny" metal when he was
at Foster’s plant viewing operation of PX 162. (A 1619-20)
During trial, he was asked and he answered:

Q You never pointed it out at that time?

16
A_ I would have, but Pete shut me up. (A 1619-20)

"Pete" is Peter E. Heuser, Hallco’s attorney. In a trial
memorandum, Hallco stated that it did not make PX 162 an
issue in the Pretrial Order because Hallco assumed all along
that Foster had a reasonable explanation for the "shiny"
metal. (A 1850) :

Hallco did not present Interrogatories Nos. 16 and 17 to
the court until after the completion of testimony. (A 46, item
481)

C. MISSTATEMENTS
Key misstatements made in the Petition are:

1. There is uncontroverted prima facie evidence showing
"fraud" in the form of a wiliful alteration of PX 162 to
change its mode of operation,

2. Foster has not presented any explanation as to
removal of the cam plate, the presence of "shiny" metal, the
presence of a milled out portion in a guide member in PX
162, and Sam Windsor’s testimony that shortly before trial he
inspected "another drive unit" which operated in the 1-2-3
mode,

3. Hallco presented uncontroverted prima facie evidence
that misconduct by Foster affected Hallco’s presentation of its
case,

4. The trial court gave no weight to the jury’s "yes"
answer to Interrogatory No. 17, and

17

5. The trial court failed to address the affect of Foster’s
conduct on "the integrity of the judicial process."

In response:

1. No Prima Facie Showing. At trial, Hallstrom
contended that Keith had altered PX 162 shortly before trial,
to change its mode of operation, and in the process removed
a cam plate, leaving "shiny" metal where the cam plate had
been attached. Keith countered by stating that when he
received PX 162 from Hallstrom in 1973 it had a 1-2-3 mode
of operation. Keith’s testimony was corroborated by Art
Wilkens, Chuck Wilkens and Darryl Oakley, each of whom
had first hand knowledge of how PX 162 operated in 1973.
It is Foster’s position that if PX 162 is a modified "inch"
system drive unit, the modifications were made by Hallstrom
back in 1973, before the drive unit was delivered to Foster.

2. The Cam Plate. Foster agrees that a cam plate was
removed from a control bar in PX 162. However, Keith
testified that he did not remove the cam plate. It is Keith’s
position that the cam plate was removed back in 1973 before
the drive unit was delivered to Keith.

3. The "Shiny" Metal. It is undisputed, PX 162 was
restored and operated in August of 1991 and at that time
Foster took pictures of PX 162 in Operation that became
exhibits in Foster’s Motion for Summary Judgment. It is also
undisputed, PX 162 was demonstrated to Hallstrom and his
attorney in June of 1992. There is testimony by Foster that
PX 162 had been stored outside at times between August of
1991 and shortly before trial. There was no testimony by
anyone as to how the region of the control bar where a cam
plate had once been attached became "shiny" on the last day
of trial, only accusations by each side. However, Foster
testified that PX 162 was steam cleaned shortly before trial.

at

18

This could be why the region in question was "shiny" on the
last day of trial.

4. The "Milled Out" Portion. During his trial
testimony and since, Hallstrom has suggested that the
member which included the "milled out" portion had been
interchanged with a like member in DX 673. On page 5 of
its Petition, Hallco implies that the corresponding member in
DX 673 includes a "milled out” portion. This is not true.
The corresponding member in DX 673 does not include a
"milled out" portion.

5. Sam Windsor’s Testimony. Sam Windsor testified
that before trial he inspected a drive unit that operated in the
1-2-3 mode, the same as PX 162. Sam Windsor did not say
that the drive unit which he examined was a different drive
unit. PX 162 was the drive unit that was inspected by Sam
Windsor before trail.

6. Alleged Misconduct. There is evidence that Foster
cleaned and restored PX 162 before demonstrating it at trial.
There is evidence that Foster first demonstrated PX 162 and
then presented testimony by Keith as to what restoration had
to be done in order to make PX 162 workable. Based on all
of the evidence, the trial court ruled that Hallco had not
established misconduct by clear and convincing evidence.

7. Interrogatory No. 17. It is incorrect to say that the
trial court gave no weight to the jury’s "yes" answer to
Interrogatory No. 17. The trial court considered the "yes"
answer to Interrogatory No. 17 in light of the jury’s "yes"
answer to Interrogatory No. 15, the jury’s "no" answer to
Interrogatory No. 16, and the court’s own evaluation of the
evidence presented and the witness demeanor displayed

8. Integrity Of The Judicial Process. The district
court took Hallco’s motion for relief for what it was; a
desperation attempt by a losing party to reverse its loss. The
trial court’s ruling was a demonstration of "the integrity of

19

the judicial process." The district court thwarted an
unwarranted attack on a "honestly procured judgment."

Il. SUMMARY OF ARGUMENT

This is not an appropriate case for review on certiorari.
There are no issues or conflicts of federal law requiring
clarification or decision by this Court, and underlying factual
issues were resolved against Petitioner.

A party requesting relief from judgment under Rule
60(b), based on alleged fraud or other misconduct of an
adverse party, must prove the alleged fraud or other
misconduct by clear and convincing evidence. Hallco is not
contending that the burden of proof is less than "clear and
convincing" or that there is a conflict amongst the circuits as
to the burden of proof.

With respect to the jury verdict that Foster "tried to
willfully mislead the court and jury", it was not an abuse of
discretion for the trial court to hold that "the court cannot
conclude that the jury made this finding by clear and
convincing evidence." It was also not an abuse of discretion
for the trial court to decide the question and rule that Hallco
had not shown by "clear and convincing" evidence that Foster
had “willfully attempted to mislead the court and jury." The
trial court itself viewed the demonstration of PX 162 and
witnessed the demeanor of all the witnesses.

It was not an abuse of discretion for the district court to
rule that “the trial tactics and strategy of Foster did not deny
Hallco an opportunity to fully and fairly present its case or
defenses." The trial court was aware of Hallco’s failure to
take discovery as to PX 162 and was aware of Hallco’s trial

20

conduct including its failure to ask for more time or request
a continuance.

In making its rulings, the trial court did not ignore, but
in fact considered, the jury’s "yes" answer to Interrogatory
No. 17. The trial court also considered Hallco’s answers to
Interrogatories Nos. 15 an 16 and took a view of the case
which made the special interrogatories consistent.

Furthermore, Hallco is not entitled to relief from
judgment with respect to the "best mode issue because
Hallstrom has not attempted to show, and cannot show, the
it has a substantial case to present with respect to the "best
mode issue.”

Ill. ARGUMENT

A. THERE ARE NO LEGAL ISSUES NEEDING
RESOLUTION

As discussed above, the questions presented by Hallco are
based on premises that are not supported by the record. The
question of possible misconduct by Foster, and its affect on
the trial, were hotly contested issues. After considering all
of the evidence and argument presented by the parties,
including the demonstration of and testimony respecting PX
162, and its observing the demeanor of the witnesses as they
testified, the trial court ruled in favor of Foster as to
Interrogatory 17. In the process, the trial court considered
and gave proper weight to the jury’s "yes" answer to
Interrogatory No. 17.

The district court ruled, and the parties agreed, the
controlling law respecting Hallco’s motion for relief under
Rule 60(b) is the law of the United States Court of Appeals

21

for the Ninth Circuit. v. Envi , 823
F.2d 1538, 1550 (Fed. Cir. 1987). To receive relief under
Rule 60(b), "the moving party must establish that a judgment
was obtained by fraud, misrepresentation, or misconduct, and
that the conduct complained of prevented the moving party
from fully and fairly presenting the case."

Peacock, 809 F.2d 1403, 1404-5 (9th Cir. 1987). Hallco has
made no attempt to show that there is a conflict among the
circuits with respect to this two-prong test.

B. FRAUD OR OTHER MISCONDUCT MUST BE
ESTABLISHED BY CLEAR AND CONVINCIN G
EVIDENCE

In its decision denying Hallco’s motion for a new trial
and relief from judgment, the district court ruled:

Hallco must first establish the fraudulent act by clear and
convincing evidence. ; » 921
F.2d 875, 878-79 (9th Cir. 1990). In Jones, the Ninth
Circuit Court ruled that "under Rule 60(b)(3), the movant
must, (1) prove by clear and convincing evidence that the
verdict was obtained through fraud, misrepresentation, or
other misconduct", citing Bunch v. United States, 680
F.2d 1271, 1283 (9th Cir. 1982) which made the same
holding.

Oregon law is the same. In
303 Or. 390, 392, 737 P.2d
595, 597 (1987), the Oregon Supreme Court stated:

[w]e hold that the burden of persuasion for
common law deceit requires the proponent to
prove each of the elements of deceit by clear
and convincing evidence.

22

In its decision, the Oregon court discussed the origins and
meanings of "preponderance" and "clear and convincing"
evidence and it made reference to a statement by then Chief
Justice Warren Burger, in Addington v. Texas, 441 U.S. 418,
424 (1979), that one typical use of the "clear and convincing"
standard is in "civil cases involving allegations of fraud or
some other quasi-criminal wrongdoing.”

Hallco has made no attempt to show that there is a
conflict among the circuits regarding the burden of proof
issue or that the burden of proof should be something other
than "clear and convincing”.

C. IT WAS NOT AN ABUSE OF DISCRETION
FOR THE TRIAL COURT TO RULE THAT IT
COULD NOT CONCLUDE THAT THE JURY
HAD FOUND THAT FOSTER "TRIED TO
WILLFULLY MISLEAD THE COURT AND
JURY" BY "CLEAR AND CONVINCING"
EVIDENCE

Halico wrote Interrogatory No. 17 and is solely
responsible for it not including the "clear and convincing”
standard of proof. It was proper and not unreasonable for the
district court to rule that it could not say that the jury applied
the correct standard of proof. Whatever prompted the jury to
answer "yes" to Interrogatory No. 17, it did not make the
jury disbelieve either Foster’s 1991 affidavit testimony or the
evidence presented at trial which prompted the jury to answer
"no" to Interrogatory No. 16 and "yes" to Interrogatory No.
15. The court correctly recognized that the jury’s "clear and
convincing" finding, in its answer to Interrogatory No. 15,
constitutes a finding by the jury that the “tried to willfully
mislead" conduct, whatever it was, was not material to the
main fact question that the jury was asked to answer.

23

The Ninth Circuit requires trial and appellate courts to
seek reconciliation of apparently inconsistent verdicts:

"When faced with a claim that verdicts are inconsistent,
the court must search for a reasonable way to read the
verdicts as expressing a coherent view of the case, and
must exhaust this effort before it is free to disregard the
jury’s verdict and remand the case for a new trial."

T V. | ories, 828 F.2d 510, 512 (9th
Cir. 1987), cert. denied, 485 US. 942 (1988), citing

ick v i io R.R., 372 U.S. 108, 119
(1963), also see Ri y. Suzuki Motor Co., 868

F.2d 1226, 1228 (Fed. Cir. 1989).

"Where there is a view of the case that makes the jury’s
answers to special interrogatories consistent, they must be
resolved that way. For a search for one possible view of
the case which will make the jury’s finding inconsistent
results in a collision with the Seventh Amendment."
Atlanti f Stevedores, Inc. v. Ellerman Lines Ltd.,
369 U.S. 355, 364 (1962).

"But it is the duty of the courts to attempt to harmonize
the answers, if it is possible under a fair reading of them:
"Where there is a view of the case that makes the jury’s
answers to special interrogatories consistent, they must be
resolved that way." Gallick v. Baltimore & Ohio R.R.,
372 U.S. at 119, citing i vedores, Inc.

v. Ellerman Lines, Ltd., 369 U.S. at 364.

Quite clearly, the district court followed the mandate of
these courts and took a view of the case which made the
jury’s findings consistent.

24

D. IT WAS NOT AN ABUSE OF DISCRETION
FOR THE TRIAL COURT TO RULE THAT
HALLCO HAD NOT SHOWN BY "CLEAR AND
CONVINCING" EVIDENCE THAT FOSTER
HAD "WILLFULLY ATTEMPTED TO
MISLEAD THE COURT AND JURY"

Faced with Interrogatory No. 17, and its omission of the
“clear and convincing" standard, and the vagueness of "tried
to willfully mislead", the district court did the reasonable
thing. That was to independently decide the question
presented by Interrogatory No. 17, using the correct standard
of proof. The jury was not furnished with any instructions
as to the meaning of "willfully", “attempt” or "mislead" in
relationship to "fraud" or "misconduct." Ezch juror was left
to his or her own frame of reference as to what he or she
thought amounted to "tried to willfully mislead." On the
other hand, the district court judge had an understanding of
what amounts to legal misconduct. She was present
throughout the trial, she viewed the demonstration of PX 162,
including the "shiny" metal on PX 162, and viewed DX 673
and witnessed the demeanor of Keith, Art Wilkens, Chuck
Wilkens, Darryi Oakley, Don Tonnagel , Richard Lawson and
Hallstrom as they testified. Under all of the circumstances,
it was entirely reasonable for the trial court to rule that
Hallco had not shown by clear and convincing evidence that
Foster had intended to mislead the court and jury.

As stated by the Ninth Circuit in Atchinson v. Barrett,
246 F.2d 846 (9th Cir. 1957), a motion for relief of judgment

or for a new trial, based on an allegation of misconduct, "is
directed to the sound discretion of the trial court, and
particularly to the discretion of the trial judge who presided
in the litigation in which the judgment (now alleged as

25

fraudulent) was entered." Atchinson v. Barrett, 246 F.2d at

849 (citations omitted). The Atchinson court further stated:

The trial judge saw and heard the plaintiff; saw his
twitchings, what they were and what they were not, as
did the jury. He saw or heard the other matters relied on
by appellant; he felt the "climate" of the trial. The trial
judge found no fraud nor misrepresentation. The Court
of Appeals should not and will not substitute its judgment
for that of the trial court, nor reverse the lower court’s
determination save for an abuse of discretion. Atchinson
v. Barrett, 246 F.2d at 849.

Hallco has not attempted to show that there is a conflict
amongst the circuits regarding this "sound discretion of the
trial court" rule.

E. IT WAS NOT AN ABUSE OF DISCRETION
FOR THE DISTRICT COURT TO RULE THAT
"THE TRIAL TACTICS AND STRATEGY OF
FOSTER DID NOT DENY HALLCO AN
OPPORTUNITY TO FULLY AND FAIRLY
PRESENT ITS CASE OR DEFENSES"

The trial court was aware that Hallco had been informed
as early as August of 1991 of Foster’s position with respect
to PX 162 and that testimony would be coming from Keith,
Art Wilkens, Chuck Wilkens and Darryl Oakley with respect
to how PX 162 operated back in 1973. The trial court was
aware of the unused pretrial opportunities of Hallco (1) to
conduct discovery with respect to PX 162, (2) to make the
alleged alteration of PX 162 an issue in trial by, before trial,
adding this issue to the Pretrial Order, or (3) to take steps to
exclude PX 162 from the trial. Also, the trial judge was
present throughout the trial and was aware that Hallco did not

26

at any time ask for additional time to present testimony and
it did not at any time ask for a continuance. The trial court
was aware that Hallco’s attorney informed it that "I think
we’re moving along real well now", etc.

Under the Ninth Circuit rule set forth in M/V_ Peacock,
supra, because the trial court had found that Foster’s
judgment was not obtained by fraud, misrepresentation or
misconduct, it was not necessary for the court to find that
Hallco had not been prevented from fully and fairly
presenting its case. In any event, the court proceeded to
decide this issue. The trial court’s finding that "the trial
tactics and strategy of Foster did not deny Hallco an
opportunity to fully and fairly present its case or defenses" is
a ruling that is subject to the "sound discretion of the trial
court" rule set forth in Atkinson. Hallco has not attempted
to show that there is a conflict amongst the circuits regarding
this rule or that this rule should not be followed for some
other reason.

F. IN MAKING ITS RULINGS, THE TRIAL
COURT DID NOT IGNORE BUT RATHER
GAVE PROPER WEIGHT TO THE JURY’S
"YES" ANSWER TO INTERROGATORY NO.
17.

On page 11 of its Petition, Hallco states:

The question left completely unanswered, even by those
circuits which have established Rule 60(b)(3) guideposts,
is whether the presentation of uncontroverted prima facie
evidence demonstrating fraud or misconduct requires the
granting of a Rule 60(b) motion, or whether a court can,
in its discretion, completely ignore uncontroverted
evidence offered to prove fraud.

27

Firstly, this case does not involve "uncontroverted prima
facie evidence demonstrating fraud or misconduct. The
evidence argued by Hallco was controverted by Foster.
Interrogatory 17 was prepared by Hallco and was directed to
"tried" conduct. The jury was not asked to find and did not
find that Foster committed "fraud" or that Foster committed
"perjury", or that Foster "doctored" PX 162, or that Foster
"manufactured evidence", or that Foster "destroyed and/or
concealed evidence." The jury found that Foster did not try
to mislead the court in his 1991 affidavit which included
pictures of PX 162 and described PX 162 as having a 1-2-3
motion when he obtained it from Hallstrom in 1973 and
installed it in the Wilkens trailer. The jury found that Foster
proved by "clear and convincing" evidence that the 1973
drive in the Wilkens trailer moved the slats in a 1-2-3 mode
and included pull blocks on the push rods. Hallco first asked
the district court, then the federal circuit court, and now asks
this Court to completely ignore these findings by the jury.
Faced with the jury’s answers to Interrogatories Nos. 15, 16
and 17, the district court followed the rule in Toner and
"search[ed] for a reasonable way to read the verdicts as
expressing a coherent view of the case." Thus, it was
necessary for the district court to exercise its sound discretion
when it was forced to consider the jury’s "yes" answer to the
"tried" conduct of Interrogatory No. 17 in light of the jury’s
finding that Foster had by "clear and convincing" evidence
established that in 1973 the Wilkens conveyor moved the
Slats in a 1-2-3 mode and included pull blocks on the push
rods.

G. HALLCO HAS NOT SHOWN THAT IT HAS A
"BEST MODE" CASE.

Foster vehemently denies Hallco’s contention that Foster
changed the mode of operation of PX 162 and the trial court

28

found for Foster on this issue. But, in any event, there is no
connection between PX 162 and the reasons why the jury
found that Hallstrom had not disclosed the best mode.

In Restatements, Second, Judgments §70, at page 183, it
is stated:

Finally, the party seeking relief must demonstrate, before
being allowed to present his case, that he has a
substantial case to present. . ..

In its Petition, Hallco has made no attempt to establish that
it has a best mode case to present. In its Brief to the Federal
Circuit, Hallco stated:

[O]ther than Mr. Foster himself, the only live witness
testifying in support Foster’s best mode defense was
Darryl Oakley, who testified as to both best mode
(A1050-53) and mode of motion of the early Wilkens
trailer. (A1048-49)

This is a clear misstatement of the record. Foster's "best
mode" defense is based on the testimony of Hallstrom
discussed above starting on page 2 of this brief.

29
IV. CONCLUSION

Hallco’s Petition should be denied because the case
presents no issue appropriate for the court’s review, and
because the lower courts’ holdings are not in error.

Respectfully submitted,

DELBERT J. BARNARD
WA State Bar No. 00415

GLENN D. BELLAMY
WA State Bar No. 17626

BARNARD, PAULY

& BELLAMY, PS.
P.O. Box 58888
Seattle, WA 98138-1888
(206) 246-0568

Attorneys for Respondent

November 30, 1994

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_0742%3A2. Public record. Not legal advice.