Opinion
Civ. No. 03-905 (RHK/JSM)
December 12, 2003
Steven W. Carlson, St. Paul, Minnesota, for Plaintiff
Mary L. Trippler, Minneapolis, Minnesota, for Defendant
MEMORANDUM OPINION AND ORDER
Introduction
This matter comes before the Court on the United States Department of Education's ("the DOE") Motion to Dismiss under Rule 12(b)(6). In the alternative, the DOE has moved for summary judgment under Rule 56. Plaintiff Stephen W. Carlson has filed a Complaint seeking Rule 60(b) relief from a final judgment. The DOE has moved to dismiss Carlson's Complaint on the ground that Carlson has not established that he is entitled to the Rule 60(b) relief sought in the Complaint. For the reasons set forth below, the Court will grant the DOE's Motion to Dismiss.
Background
The sole issue in this case is described by Carlson as follows: "Either Plaintiff owes [the DOE] money on account of his student loans issued in 1976 and 1978 or he does not." (PL's Mem. in Opp'n at 20.) This issue, however, has previously been decided by this Court and affirmed by the Eighth Circuit.I. Factual Background
Carlson is indebted to the DOE for two student loans he took out to attend the University of Minnesota ("the University"). (Scaniffe Decl. ¶¶ 22, 23.) The first was a 1976 Federally Insured Student Loan ("the 1976 Loan") for $1,665.00 at 7% interest. (Id. ¶ 22.) The second was a 1978 Federal Family Education Loan Program loan ("the 1978 Loan") for $2,500.00 at 7% interest. (Id. ¶ 23.) Carlson was obligated to begin repaying his loans nine months after he stopped carrying a half-time academic workload. (Id. ¶ 24.) While enrolled at the University, Carlson was active in campus politics and was a civil rights advocate. (Compl. ¶ 7.) In the underlying case (in which the DOE sued Carlson for these unpaid loans), as in this case, Carlson alleged that he was falsely declared in default on his loans in retaliation for protesting the University's alleged civil rights abuses. (Id. ¶ 5.) The DOE stipulated in the underlying case — for the purpose of calculating interest on the defaulted loans — that Carlson ceased carrying a half-time academic load in the fall of 1983, and therefore was required to begin repaying both loans by October 1, 1984. See infra II Procedural Background. Carlson, however, has never repaid his loans. (Scaniffe Decl. ¶ 25.)
II. Procedural Background
In 1999, the DOE sued Carlson to collect on the defaulted student loans. Carlson responded, in part, by asserting a Counterclaim under the Higher Education Act, the Civil Rights Act, 42 U.S.C. § 1983 and the First Amendment against the DOE for failing to protect him from the University's retaliatory declaration of his loan defaults. (See Loken Decl. Exs. A (United States v. Carlson, Civ. No. 99-1918 (PAM/JGL), slip op. at 1-2 (D. Minn. June 2, 2000) (order granting partial summary judgment and dismissal of counterclaims)), C (Carlson's Answer at 5-7, Carlson, Civ. No. 99-1918 (PAM/JGL)).) Carlson also filed a third-party Complaint against the University. (Loken Decl. Ex. D.)
In April 2000, the DOE moved for summary judgment on its collection claims and on Carlson's counterclaim. Supporting the motion was the Declaration of Joan Dyer, a Loan Analyst with the Litigation Branch of the DOE. (See Loken Decl. Ex. F (Dyer Decl. ¶ 1).) Dyer's Declaration contained several errors. First, Dyer stated that both loans were guaranteed by North Star Guaranty, Inc., but the 1976 Loan did not have a guarantor and the 1978 Loan was guaranteed by the Higher Education Assistance Foundation. (Scaniffe Decl. ¶ 27(a).) Second, Dyer stated that both loans defaulted on March 2, 1982; however, only the 1976 Loan defaulted on that date, while the 1978 Loan defaulted on May 16, 1979. (Id. ¶ 27(b).) Third, Dyer described both loans as Federal Family Education Loan Program loans, but only the 1978 Loan was of this type. (Id. ¶ 27(c).) Finally, Dyer indicated that both loans were assigned to the DOE on October 25, 1989, but only the 1978 Loan was assigned on that date, while the 1976 Loan was assigned to the DOE on November 13, 1979. (Id. 127(d).)
Relying, in part, on the Dyer Declaration, Judge Magnuson granted the DOE's motion for summary judgment on its collection claims and on Carlson's counterclaim. (Loken Decl. Exs. A (Carlson, Civ. No. 99-1918 (PAM/JGL) (D. Minn. June 2, 2000)), J (United States v. Carlson, Civ. No. 99-1918 (PAM/JGL) (D. Minn. Oct. 20, 2000) (order granting partial summary judgment)).) Carlson's subsequent Motion for a New Trial, to Amend Findings and to Dismiss was denied. (Loken Decl. Ex. L (United States v. Carlson, Civ. No. 99-1918 (PAM/JGL) (D. Minn. Nov. 9, 2000) (order denying reconsideration)).) Carlson's Motion to Reinstate was similarly denied. (Loken Decl. Ex. N (United States v. Carlson, Civ. No. 99-1918 (PAM/JGL) (D. Minn. June 15, 2001) (order denying reinstatement)).)
Because Carlson's third-party Complaint against the University was not affected by Judge Magnuson's Order granting summary judgment in favor of the DOE, in 2002, Judge Magnuson directed the entry of a final judgment in favor of the DOE and against Carlson. (Id. Ex. O (United States v. Carlson, Civ. No. 99-1918 (PAM/JGL) (D. Minn. Jan. 18, 2002) (order entering judgment under Rule 54(b))).) On appeal, the Eighth Circuit affirmed. See United States v. Carlson, No. 02-1852, 2002 WL 1784900, at *1 (8th Cir. Aug. 5, 2002) (unpublished). Carlson's subsequent motions to the Eighth Circuit for rehearing were denied. (See Loken Decl. Exs. P, Q.) Carlson then unsuccessfully petitioned for certiorari to the United States Supreme Court. (Id. Exs. R, S.)
Carlson now files this Complaint seeking Rule 60(b) relief from the judgment in the underlying case on the grounds that it was based on errors contained in the Dyer Declaration and the discovery of new evidence. (Compl. at 1, 2.) Carlson also seeks Rule 11 sanctions. (Id. at 29.)
Carlson's new evidence consists of: (1) two letters addressed to Carlson dated December 6, 1977 and February 1, 1978 from the University's President; (2) a letter addressed to James Duarte dated May 18, 1979 from the United States Department of Health, Education and Welfare ("DHEW"); (3) a letter addressed to Frank Guzman dated October 24, 1979 from the DHEW; (4) National Student Loan Data System computer screen printouts regarding Carlson's student loan history; (5) an undated newspaper article from The Minnesota Daily; and (6) the corrections to the Dyer Declaration. (See Compl. at 8-9, 15-17, 18-20, Exs.)
Standard of Decision
Under Rule 12(b)(6), all factual allegations must be accepted as true and every reasonable inference must be made in favor of the complainant. Fed.R.Civ.P. 12(b)(6); see Midwestern Mach., Inc. v. Northwest Airlines. Inc., 167 F.3d 439, 441 (8th Cir. 1999); Carney v. Houston, 33 F.3d 893, 894 (8th Cir. 1994). "[D]ismissal under Rule 12(b)(6) serves to eliminate actions which are fatally flawed in their legal premises and destined to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity." Young v. City of St. Charles. Mo., 244 F.3d 623, 627 (8th Cir. 2001) (citation omitted). A cause of action "should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff cannot prove any set of facts in support of his claim that would entitle him to relief." Schaller Tel. Co. v. Golden Sky Sys., Inc., 298 F.3d 736, 740 (8th Cir. 2002) (citations omitted).
Analysis
I. Relief From Judgment
The DOE has moved to dismiss Carlson's Complaint, which seeks Rule 60(b) relief from the final judgment in the underlying case. Rule 60(b) states in relevant part:
On motion . . . the court may relieve a party . . . from a final judgment . . . for the following reasons: . . . (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party. . . . This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment . . . or to set aside a judgment for fraud upon the court.
Fed.R.Civ.P. 60(b). Therefore, there are three ways in which one may attempt to obtain relief from a judgment: (1) on a Rule 60(b) motion for the enumerated reasons (i.e. newly discovered evidence or fraud), (2) in an independent action, or (3) upon a showing of fraud upon the court. Fed.R.Civ.P. 60(b); see 12 James Wm. Moore et al.,Moore's Federal Practice ¶ 60.21 (3d ed. 2003); United States v. Buck, 281 F.3d 1336, 1340-42 (10th Cir. 2002); see also Greiner v. City of Champlin, 152 F.3d 787, 788-89 (8th Cir. 1998). Although Carlson denominates this action as one brought under Rule 60(b), it appears to be either an independent action or an equitable action for fraud upon the Court. (Compl. at 1); see Greiner, 152 F.3d at 789. Out of an abundance of caution, however, the Court will assess Carlson's claims under each of the three methods of relief.
A. On Rule 60(b) Motion For the Enumerated Reasons
The DOE has moved to dismiss Carlson's Rule 60(b) claims for relief. Generally, Rule 60(b) motions are viewed with disfavor and "provide . . . extraordinary relief, which may be granted only upon a showing of exceptional circumstances." Mitchell v. Shalala, 48 F.3d 1039, 1041 (8th Cir. 1995) (citation omitted); see Rosebud Sioux Tribe v. A P Steel Inc., 733 F.2d 509, 515 (8th Cir. 1984). To prevail on a Rule 60(b)(2) motion on the basis of newly discovered evidence, the movant must show: (1) the evidence was discovered after trial; (2) due diligence was exercised to discover the evidence; (3) the evidence is material and not merely cumulative or impeaching; and (4) the evidence is such that a new trial would probably produce a different result. Mitchell, 48 F.3d at 1041. To prevail on a Rule 60(b)(3) motion on the basis of fraud or misrepresentation, the movant must show by clear and convincing evidence that his opponent engaged in a fraud or misrepresentation that prevented the movant from fully and fairly presenting his case. Greiner, 152 F.3d at 789.
Carlson's claims for relief under Rule 60(b) fail. First, Carlson has not made a motion for relief based on newly discovered evidence or fraud. Rather, he has filed a complaint, Rule 60(b) states that "[o]n motion" the court may grant relief for the enumerated reasons. Fed.R.Civ.P. 60(b). Second, even if Carlson had filed a motion, he has not shown due diligence in discovering the alleged new evidence and none of it would produce a result different from that in the underlying case. See Mitchell, 48 F.3d at 1041. In addition, Carlson has not shown by clear and convincing evidence that the DOE — by offering the Dyer Declaration — engaged in fraud or misrepresentation that prevented him from fully and fairly presenting his case. See Greiner, 152 F.3d at 789. The errors contained in the Dyer Declaration had no effect on Carlson's ability to present a defense or a counterclaim.
B. Independent Action
Next, the DOE asserts that Carlson has not alleged facts supporting an independent action for relief. Rule 60(b) "does not limit the power of a court to entertain an independent action to relieve a party from a judgment." Fed.R.Civ.P. 60(b). In other words, Rule 60(b) does not disturb the power federal courts had prior to the adoption of Rule 60 to relieve a party from a judgment by means of an independent action according to traditional principles of equity. See id. advisory committee's note of 1946; 12 Moore's, ¶ 60.80; see also Treadway v. Academy of Motion Picture Arts Sciences, 783 F.2d 1418, 1420 (9th Cir. 1986). Independent actions, however, are reserved only for "those cases of injustices which, in certain instances, are deemed sufficiently gross to demand a departure from rigid adherence to the doctrine of res judicata" and are available "only to prevent a grave miscarriage of injustice." United States v. Beggerly, 524 U.S. 38, 46, 47 (1998) (citations and internal quotations omitted). Although independent actions may be based on newly discovered evidence, fraud or misrepresentation, 12 Moore's, ¶ 60.81[1], [4], they are not vehicles for the relitigation of issues previously decided, Griffin v. Fed. Deposit Ins. Corp., 831 F.2d 799, 803 (8th Cir. 1987). The vast majority of courts that have addressed this issue hold that perjury or non-disclosure does not, by itself, sustain an independent action.See 12 Moore's, ¶ 60.81[1][b][ii] (citing cases and noting that the Third Circuit has held otherwise); Geo. P. Reintjes Co., Inc. v. Riley Stoker Corp., 71 F.3d 44, 46-49 (1st Cir. 1995) (collecting cases); see also United States v. Throckmorton, 98 U.S. 61, 66 (1878) ("[T]he doctrine is equally well settled that the court will not set aside a judgment because it was founded on a fraudulent instrument, or perjured evidence. . . .").
Carlson's allegations do not support an independent action. Nothing in his Complaint demonstrates a "grave miscarriage of justice" warranting a departure from the judgment in the underlying case. See Beggerly, 524 U.S. at 46, 47. Carlson has had his day in court. This Court has previously determined that Carlson owed the DOE money for his student loans and that his counterclaims were barred by sovereign immunity. Neither the alleged newly discovered evidence nor the errors in the Dyer Declaration demands a departure from the doctrine of res judicata. See Beggerly, 524 U.S. at 46;Throckmorton, 98 U.S. at 66; see also Federated Dep't Stores. Inc. v. Moitie, 452 U.S. 394, 398 (1981) (under the doctrine of res judicata, "[a] final judgment on the merits of an action precludes [Carlson] from relitigating issues that were or could have been raised in that action" (citations omitted)).
As stated by the court in the underlying case: "Carlson . . . asserts that he need not repay his student loans because the University engaged in discriminatory and fraudulent behavior. Even if true, such claims are wholly separate from his financial obligation to the Government, and have no effect on that obligation whatsoever." (Loken Decl. Ex. A (Carlson, Civ. No. 99-1918 (PAM/JGL), slip op. at 5 (D. Minn. June 2, 2000) (citing United States v. Olavarrieta, 812 F.2d 640, 643 (11th Cir. 1987))).)
C. Fraud Upon The Court
Finally, the DOE asserts that Carlson fails to show fraud upon the court. Another procedure for relief reserved by Rule 60 is the court's inherent power to set aside its judgment if procured by fraud upon the court. 12 Moore's, ¶ 60.21[4]; Buck, 281 F.3d at 1341-42. Fraud upon the court is defined in terms of its effect on the integrity of judicial process. 12 Moore's, ¶ 60.21 [4][a] n. 19 (citing Hazel-Atlas Co. v. Hartford-Empire Co., 322 U.S. 238, 246 (1944)). It involves more than an injury to a single litigant or a particular misrepresentation or concealment. Id. ¶ 60.21 [4][a]. The Eighth Circuit characterizes fraud upon the court as "only . . . the most egregious misconduct directed to the court itself, such as bribery of a judge or jury or fabrication of evidence by counsel." Greiner, 152 F.3d at 789 (citation omitted). Perjury or non-disclosure does not, by itself, amount to fraud on the court.See 12 Moore's, ¶ 60.21[4][a]-[c]; In re Genesys Data Tech., Inc., 204 F.3d 124, 130-31 (4th Cir. 2000) (collecting cases).
Carlson's contention that the Dyer Declaration is a fraud upon the court is not supported by the contents of the Declaration itself or by the case law. See Greiner, 152 F.3d at 789; In re Genesvs, 204 F.3d at 130-31; 12 Moore's, ¶ 60.21[4]. The Dyer Declaration's errors are not the kind of egregious conduct directed toward the court that is recognized as a fraud upon the court.See Greiner, 152 F.3d at 789.
Accordingly, because Carlson has failed to state a claim for relief from final judgment under any of the available methods, the Court will grant the DOE's Motion to Dismiss Carlson's Complaint.
II. Carlson's Rule 11 Claim
Carlson's Complaint requests Rule 11 sanctions against the DOE. As the Eighth Circuit has recognized, however, "Rule 11 sanctions must be sought by motion in a pending case; there can be no independent cause of action instituted for Rule 11 sanctions." Handeen v. Lamaire, 112 F.3d 1339, 1345 n. 8 (8th Cir. 1997) (citations and internal quotations omitted). While Carlson has provided a "safe harbor warning," no motion has been made. Accordingly, the Court will grant the DOE's Motion on Carlson's Rule 11 claim.
Conclusion
Based on the foregoing, and all of the files, records, and proceedings herein, IT IS ORDERED that the Defendant United States Department of Education's Motion to Dismiss (Doc. No. 10) is GRANTED. Plaintiff Steven W. Carlson's Complaint (Doc. No. 1) is DISMISSED WITH PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.