United States v. Sierra Pacific Industries, Inc. , 862 F.3d 1157 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 15-15799
Plaintiff-Appellee,
D.C. No.
v. 2:09-cv-02445-
WBS-AC
SIERRA PACIFIC INDUSTRIES, INC.;
W.M. BEATY AND ASSOCIATES, INC.;
ANN MCKEEVER HATCH, as trustee OPINION
of the Hatch 1987 revocable trust;
RICHARD L. GREENE, As Trustee of
the Hatch Irrevocable Trust; BROOKS
WALKER, JR., as Trustee of the
Brooks Walker, Jr. Revocable Trust
and the Della Walker Van Loben
Sels Trust for the issue of Brooks
Walker, Jr; BROOKS WALKER III,
individually and as trustee of the
Clayton Brooks Danielsen, the
Myles Walker Danielsen, and the
Benjamin Walker Burlock trust, the
Margaret Charlotte Burlock Trust;
LESLIE WALKER, individually and as
trustee of the Brooks Thomas
Walker Trust, the Susie Kate Walker
Trust and the Della Grace Walker
trusts; WELLINGTON SMITH
HENDERSON, JR., as Trustee of the
Henderson Revocable Trust; ELENA
D. HENDERSON; MARK W.
2 UNITED STATES V. SIERRA PACIFIC INDUS.
HENDERSON, as Trustee of the Mark
W. Henderson Revocable Trust;
JOHN C. WALKER, individually and
as trustee of the Della Walker Van
Loben Sels trust for the issue of John
C. Walker; JAMES A. HENDERSON;
CHARLES C. HENDERSON, as Trustee
of the Charles C. and Kirsten
Henderson Revocable Trust; JOAN
H. HENDERSON; JENNIFER WALKER,
individually and as trustee of the
Emma Walker Silverman Trust and
the Max Walker Silverman Trust;
KIRBY WALKER; LINDSEY WALKER,
AKA Lindsey Walker-Silverman,
individually and as trustee of the
Reilly Hudson Keenan and Madison
Flanders Keenan Trust; EUNICE E.
HOWELL, DBA Howell’s Forest
Havesting Company, individually,
Defendants-Appellants.
Appeal from the United States District Court
for the Eastern District of California
William B. Shubb, Senior District Judge, Presiding
Argued and Submitted May 17, 2017
San Francisco, California
Filed July 13, 2017
UNITED STATES V. SIERRA PACIFIC INDUS. 3
Before: Sidney R. Thomas, Chief Judge, Mary H.
Murguia, Circuit Judge, and Jon P. McCalla,* District
Judge.
Opinion by Chief Judge Thomas
SUMMARY**
Fraud on the Court / Fed. R. Civ. P. 60(d)(3)
The panel affirmed the district court’s denial of
defendants’ motion for relief from judgment under Fed. R.
Civ. P. 60(d)(3) based on allegations of fraud, following a
settlement in a civil action brought by the United States
against private forestry operators and individuals to recover
damages for the Moonlight Fire that burned portions of the
Plumas and Lassen National Forests in 2007.
The defendants argued that the government’s alleged
misrepresentations throughout the investigation and litigation
constituted fraud on the court. The defendants also alleged
newly-discovered fraud after the settlement.
The panel held that a finding of fraud on the court is
reserved for material, intentional misrepresentations that
could not have been discovered earlier, even through due
*
The Honorable Jon P. McCalla, United States District Judge for the
Western District of Tennessee, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4 UNITED STATES V. SIERRA PACIFIC INDUS.
diligence. The panel held that the district court properly
concluded that Sierra Pacific Industries, Inc. did not
demonstrate fraud on the court regarding any of the alleged
fraud it discovered before settlement. The panel further held
that none of the allegations of after-discovered fraud, either
individually or as a whole, established that the government
committed fraud on the court within the meaning of Rule 60.
The panel rejected defendants’ argument that the district
court judge was required to recuse himself under Canon 3C
of the Code of Conduct for United States Judges and
28 U.S.C. § 455(a) because of an appearance of bias created
by activity on a Twitter account that did not bear the judge’s
name, but was allegedly controlled by him. The panel
reviewed the allegations for plain error because defendants
failed to first raise the issue before the district court.
Specifically, the panel held that the claim – that an unknown
Twitter account, not identified with a judge or the judiciary,
followed a public Twitter account maintained by the U.S.
Attorney – did not provide a basis for recusal. The panel
further held that the fact that the Twitter account followed
the U.S. Attorney did not mean that the public tweets
published by the U.S. Attorney constituted improper ex parte
communications. Finally, the panel rejected defendants’
allegation that the judge’s action in tweeting the link to an
allegedly erroneous news article required reversal. The panel
concluded that retroactive recusal of the district court judge
was not warranted, and vacatur of the district court’s order
was also unwarranted.
UNITED STATES V. SIERRA PACIFIC INDUS. 5
COUNSEL
William R. Warne (argued), Meghan M. Baker, Annie S.
Amaral, and Michael J. Thomas, Downey Brand LLP,
Sacramento, California; Jennifer T. Lias and Richard W.
Beckler, Bracewell & Giuliani LLP, Washington, D.C.; for
Defendants-Appellants Sierra Pacific Industries, Inc.
Richard S. Linkert (argued) and Julia M. Reeves, Matheny
Sears Linkert & Jaime, Sacramento, California; Phillip R.
Bonotto, Rushford & Bonotto LLP, Sacramento, California;
for landowner Defendants-Appellants.
David T. Shelledy (argued), Matthew D. Segal, and Kelli L.
Taylor, Assistant United States Attorneys; United States
Attorney’s Office, Sacramento, California; for Plaintiff-
Appellee.
Julie A. Weis, Haglund Kelley LLP, Portland, Oregon, for
Amicus Curiae Michael Cole and Tom Hoffman, Retirees of
the California Department of Forestry and Fire Protection.
Theodore J. Boutrous, Jr. and Blaine H. Evanson, Gibson
Dunn & Crutcher LLP, Los Angeles, California; Katherine C.
Yarger, Gibson Dunn & Crutcher LLP, Denver, Colorado;
Stephen S. Schwartz and Daniel Z. Epstein, Cause of Action
Institute, Washington, D.C.; for Amicus Curiae Cause of
Action Institute.
Parker Douglas, Utah Federal Solicitor, and Sean D. Reyes,
Attorney General, Utah Attorney General’s Office, Salt Lake
City, Utah; Mark Brnovich, Attorney General, United States
Attorney’s Office, Phoenix, Arizona; Adam Paul Laxalt,
Attorney General, United States Attorney’s Office, Carson
6 UNITED STATES V. SIERRA PACIFIC INDUS.
City, Nevada; Doug Peterson, Attorney General, Attorney
General’s Office, Lincoln, Nebraska; Brad D. Schimel,
Attorney General, Wisconsin Department of Justice,
Madison, Wisconsin; for Amici Curiae Attorney Generals for
the States of Arizona, Nebraska, Nevada, Utah, and
Wisconsin.
OPINION
THOMAS, Chief Judge:
We are asked to decide whether certain allegations of
fraud, some of which were known before the parties settled
and some of which came to light after settlement, rise to the
level of fraud on the court such that relief from the settlement
agreement is warranted under Federal Rule of Civil Procedure
60(d)(3). Because the instances of alleged fraud known
before settlement cannot justify relief, and the instances
discovered after settlement do not rise to the level of fraud on
the court under Rule 60(d)(3), we affirm.
I
This case arises from a forest fire that broke out on
private property near the Plumas National Forest in northern
California on September 3, 2007. The Moonlight Fire, as it
came to be known, eventually burned 46,000 acres of the
Plumas and Lassen National Forests and resulted in the
United States bringing a civil action against private forestry
operators, Sierra Pacific Industries, Inc. (“Sierra Pacific”) and
Howell’s Forest Harvesting Company (“Howell”), and other
individuals to recover damages for that fire.
UNITED STATES V. SIERRA PACIFIC INDUS. 7
A
Sierra Pacific contracted with Howell to conduct logging
operations on the land where the Moonlight Fire is believed
to have started. On the morning of the fire, two Howell
employees had been operating bulldozers in the area, but they
left without inspecting the site for sparks or signs of fire.
After the fire was spotted from a U.S. Forest Service
(“Forest Service”) lookout tower in the early afternoon,
Forest Service investigator Dave Reynolds visited the site
where the fire was believed to have started. Reynolds
interviewed JW Bush, one of the Howell employees who had
been working at the site that morning, but the site was too hot
to investigate further at the time.
Reynolds returned to the site the following day with Josh
White, an investigator from the California Department of
Forestry and Fire Protection (“Cal Fire”). According to the
Origin and Cause Investigation Report jointly released by the
Forest Service and Cal Fire, that day the investigators
identified a “general origin area” and a “specific origin area”
based on fire indicators in the area. On September 4th and
5th, White and Reynolds took numerous photos and
measurements of relevant points within the origin site, and
they placed numbered markers and colored flags to mark
certain fire indicators and other evidence.
Sierra Pacific and the other defendants allege that White
and Reynolds identified a specific point of origin that they
marked with a single white flag, and took measurements and
photographs of that point. The government denies that the
investigators identified this point as the specific point of
origin. Instead, the government notes that the investigators
8 UNITED STATES V. SIERRA PACIFIC INDUS.
took photos of two other rocks, which appeared to have
marks from bulldozer blades or treads, and which were
ultimately identified in the final report as the points of origin
for the fire. Investigators White and Reynolds also used a
magnet to search the area and identified metal shavings near
these two rocks, which they collected as evidence. Diane
Welton, another Forest Service investigator, joined the
investigation and visited the origin site on September 8th.
Welton agreed with the other investigators’ assessment of the
fire’s origin.
Cal Fire and the Forest Service released their joint Origin
and Cause Investigation Report in June 2009. The report
concluded that one of the Howell bulldozers had caused the
fire by striking a rock, which created a spark that ignited
forest litter on the ground and eventually broke out into a fire
that spread into the surrounding forest.
B
The United States filed this action against Sierra Pacific,
Howell, and a number of individual defendants (collectively,
“the Defendants”) in August 2009. The government sought
nearly $800 million in damages caused by the Moonlight Fire
and compensation for the resources spent fighting it. The
California Attorney General’s office, representing Cal Fire,
filed a state court action against the Defendants earlier the
same month. The U.S. Attorney and the California Attorney
General entered into a joint prosecution agreement, but the
two cases proceeded separately.1
1
Cal Fire and the California Attorney General’s office took no part
in the federal case, and the U.S. Attorney’s office took no part in the state
case.
UNITED STATES V. SIERRA PACIFIC INDUS. 9
The parties in this federal case engaged in extensive
discovery and motion practice over the next three years.
Most relevantly, the government produced a number of
documents during discovery that led the Defendants to
believe that the government had engaged in fraud during and
after its investigation of the Moonlight Fire, in an attempt to
blame the fire on them. Specifically, the Defendants
discovered photographs and an early sketch that appeared to
place the point of origin in a slightly different spot than the
final report; an aerial video of the smoke plume that allegedly
undermined the government’s point-of-origin determination;
an expert report that had used the wrong slope angle in
modeling fire dynamics and had not been corrected; and
evidence regarding alleged employee misconduct at the
Forest Service’s Red Rock Lookout Tower before the fire
was spotted. The Defendants also alleged at various points in
the pre-trial proceedings that the government had advanced
a fraudulent Origin and Cause report based on these cover-
ups; had misrepresented the investigator’s interview with
Howell employee JW Bush shortly after the fire started; had
misrepresented evidence regarding other forest fires started
by Howell; had proffered false testimony by the investigators
regarding the origin of the fire; and had failed to adequately
investigate arson as a possible cause of the fire, particularly
in light of evidence that wood cutter Ryan Bauer had been
using a chainsaw in the vicinity of the fire on the day it
began.
The government moved in limine to exclude much of the
evidence supporting the Defendants’ theories of fraud and
concealment, and the district court granted this motion in
part. The court’s final pre-trial order precluded the
Defendants from introducing evidence to show conspiracy
but permitted them “to introduce evidence that there was an
10 UNITED STATES V. SIERRA PACIFIC INDUS.
attempt to conceal information from the public or the
defense.” The Defendants also wanted to present evidence
that the government had failed to investigate possible arson
by Ryan Bauer, though the Defendants disavowed any
intention of actually proving that Bauer started the fire. The
court permitted the Defendants to introduce “evidence
indicating arson was not considered to show weaknesses in
the investigation following the fire” but precluded evidence
demonstrating that a particular person, such as Bauer, had
started the fire. Nonetheless, the court’s oral ruling explained
that the Defendants would be permitted to present evidence
that Bauer was “near the scene, seen by witnesses, and there
was no follow-up” during the fire investigation. The court’s
written order specifically stated that each of these in limine
rulings was “made without prejudice and [was] subject to
proper renewal, in whole or in part, during trial.”
Three days before trial was set to begin, the parties
reached a settlement agreement under which the Defendants
agreed to pay $55 million and transfer 22,500 acres of land to
the government.2 The terms also specified:
The Parties understand and acknowledge that
the facts and/or potential claims with respect
to liability or damages regarding the above-
captioned actions may be different from facts
now believed to be true or claims now
believed to be available (“Unknown Claims”).
Each Party accepts and assumes the risks of
such possible differences in facts and
2
Sierra Pacific agreed to pay $47 million and transfer 22,500 acres;
Howell’s agreed to pay $1 million; Beaty and the other landowners agreed
to pay $7 million.
UNITED STATES V. SIERRA PACIFIC INDUS. 11
potential claims and agrees that this
Settlement Agreement shall remain effective
notwithstanding any such differences. . . .
Accordingly, this Settlement Agreement, and
the releases contained herein, shall remain in
full force as a complete release of Unknown
Claims notwithstanding the discovery or
existence of additional or different claims or
facts before or after the date of this Settlement
Agreement.
Following entry of the settlement agreement, the district court
entered judgment dismissing the case with prejudice at the
parties’ request.
The state case proceeded after settlement of the federal
case. While the state proceedings were pending, several other
instances of alleged misrepresentation and fraud came to
light. The state case was ultimately dismissed with prejudice
before going to trial, and the California Superior Court
imposed terminating sanctions on Cal Fire’s attorneys,
concluding that they had engaged in “pervasive misconduct”
and “a systematic campaign of misdirection with the purpose
of recovering money from the Defendants.”
In the federal case, the Defendants then filed a motion for
relief from judgment under Federal Rule of Civil Procedure
60(d)(3), arguing that the government’s alleged
misrepresentations throughout the investigation and litigation
constituted fraud on the court. That motion is the subject of
this appeal.
In addition to the misrepresentations that the Defendants
raised prior to settlement, which it re-alleged in the Rule
12 UNITED STATES V. SIERRA PACIFIC INDUS.
60(d)(3) motion, the Defendants also alleged newly-
discovered fraud. First, Defendants had learned that Ryan
Bauer’s father, Edwin Bauer, had accused Sierra Pacific’s
legal counsel (apparently falsely) of offering him a bribe to
say that his son started the fire. The Defendants alleged that
the government knew of this false bribe accusation but
fraudulently failed to disclose it, despite representing to the
court that there was not a “shred” of evidence pointing to
Bauer. The Defendants also alleged that they had learned that
the government had instructed the fire investigators to lie
about the significance of the white flag by telling them it was
a “non-issue” during a meeting prior to the investigators’
depositions.
Finally, the Defendants cited a new report issued by the
California State Auditor that some of the funds recovered in
state wildfire cases were being put into an extra-legal account
called the Wildland Fire Investigation Training and
Equipment Fund (“WiFITER”), rather than into the state
treasury. In their Rule 60(d)(3) motion, the Defendants
alleged that the government had misrepresented the nature of
the fund in this federal case. The Defendants also alleged that
Cal Fire’s Investigator White stood to benefit from the fund
and that his improper financial incentives had tainted the
entire wildfire investigation on which the government had
relied.
After an initial status conference on the Rule 60 motion,
the district court ordered the parties to submit briefing on the
“threshold question” of “whether, assuming the truth of the
Defendants’ allegations, each alleged act of misconduct
separately or collectively constituted ‘fraud on the court’
UNITED STATES V. SIERRA PACIFIC INDUS. 13
within the meaning of Rule 60(d)(3).”3 The district court also
asked the parties to identify whether the Defendants had
learned of each alleged act before or after the settlement and
dismissal of the case.
After holding an oral hearing on the Rule 60 motion, the
district court denied the motion in a detailed written order.
With respect to the alleged fraud that the Defendants had
known about before settlement—namely the conflicting
evidence regarding the point of origin and the alleged
misconduct at the lookout tower—the district court concluded
that this conduct could not constitute fraud on the court
because the doctrine only allows relief from judgment for
“after-discovered fraud.” See Hazel-Atlas Glass Co. v.
Hartford-Empire Co., 322 U.S. 238, 244 (1944).
With respect to the allegations of fraud that the
Defendants claimed to have discovered only after settlement,
the district court concluded that relief was barred by the
specific terms of the settlement; alternatively, it concluded
that relief was unwarranted because the new allegations
surrounding the white flag testimony were unsupported by the
record, the government did not have a duty to disclose the
false bribe accusation made by Edwin Bauer, and the
government had not committed fraud on the court through its
representations about Cal Fire’s WiFITER fund.4 The district
3
After the original district court judge recused herself from hearing
the Rule 60 motion, the case was eventually assigned to a different judge
within the Eastern District of California.
4
The district court also discussed and rejected the Defendants’
allegations regarding an investigator’s handwritten notes, and the removal
of one of the Assistant United States Attorneys who originally worked on
the case. Because the Defendants did not discuss those allegations on
14 UNITED STATES V. SIERRA PACIFIC INDUS.
court concluded that, because none of these allegations
constituted fraud on the court, the totality of the
government’s conduct similarly failed to rise to that level.
The same day that the district court denied the
Defendants’ motion, the U.S. Attorney’s Office for the
Eastern District of California posted eight tweets about the
outcome of the case via its Twitter account. That evening, a
Twitter account allegedly owned by the federal district judge
presiding over the Rule 60 motion, which followed the U.S.
Attorney’s account, posted a tweet with a link to a news
article about the Moonlight Fire. The tweet contained the
title of the news article, “Sierra Pacific still liable for
Moonlight Fire damages,” as well as a link to the article
itself.
The Defendants timely appealed the denial of their Rule
60 motion, arguing that the district court erred in failing to
grant the motion and that the judge should be retroactively
recused based on the activity of the Twitter account allegedly
belonging to him. The district court had jurisdiction over this
case under 28 U.S.C. §1345, and we have jurisdiction to hear
the appeal under 28 U.S.C. § 1291 because the denial of a
Rule 60 motion for relief from judgment is a final, appealable
order. See United States v. Estate of Stonehill, 660 F.3d 415,
443 (9th Cir. 2011).
appeal, they are waived. Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th
Cir. 2009).
UNITED STATES V. SIERRA PACIFIC INDUS. 15
In the context of Rule 60(d)(3), we “review denials of
motions to vacate for abuse of discretion.”5 Id. at 443. Under
this standard, we review questions of law de novo, United
States v. Hinkson, 585 F.3d 1247, 1261–62 (9th Cir. 2009),
and “[a] district court by definition abuses its discretion when
it makes an error of law,” Koon v. United States, 518 U.S. 81,
100 (1996) (citing Cooter & Gell v. Hartmarx Corp., 496
U.S. 384, 405 (1990)). We review the district court’s
findings of fact for clear error. Hinkson, 585 F.3d at 1261.
A district judge’s failure to sua sponte recuse himself or
herself is reviewed for plain error where, as here, the issue
was not raised in the district court.6 United States v. Spangle,
626 F.3d 488, 495 (9th Cir. 2010).
5
The Defendants argue that de novo review is appropriate because,
by asking the parties to brief only the legal sufficiency of the Defendants’
allegations, the district court created a procedural posture akin to a Rule
12(b)(6) motion to dismiss. Yet a motion under Rule 60(d)(3) is grounded
in the court’s inherent power to set aside a judgment. Such an action “is
based on equity,” and we “review a district court’s decision to deny
equitable relief for an abuse of discretion.” Appling v. State Farm Mut.
Auto. Ins. Co., 340 F.3d 769, 780 (9th Cir. 2003). Abuse of discretion
review is therefore appropriate here.
6
The Defendants argue that they had no opportunity to raise this issue
in the district court because the challenged tweet was not posted until after
judgment was entered. But evidence submitted by the Defendants shows
that the same Twitter account had posted several other news articles about
the case while proceedings were still ongoing. The Defendants therefore
had an opportunity to raise the issue below, and only plain error review is
available on appeal.
16 UNITED STATES V. SIERRA PACIFIC INDUS.
II
A
Federal Rule of Civil Procedure 60 enumerates several
possible grounds for setting aside a judgment. While Rule
60(c) sets a one-year time limit for a Rule 60(b)(3) motion
based on “fraud . . . , misrepresentation, or misconduct,”
Rule 60(d)(3) provides that “[t]his rule does not limit a
court’s power to . . . set aside a judgment for fraud on the
court” (emphasis added). Therefore, relief based on fraud on
the court is not subject to the one-year time limit. Appling,
340 F.3d at 784.7 Because its motion was made more than a
year after the entry of judgment in this case, Sierra Pacific
moved for relief under Rule 60(d)(3) and therefore must show
fraud on the court, rather than the lower showing required for
relief under Rule 60(b)(3).
A court’s power to grant relief from judgment for fraud
on the court stems from “a rule of equity to the effect that
under certain circumstances, one of which is after-discovered
fraud, relief will be granted against judgments regardless of
the term of their entry.” Hazel-Atlas, 322 U.S. at 244 (citing
Marine Ins. Co. v. Hodgson, 11 U.S. (7 Cranch) 332 (1813);
Marshall v. Holmes, 141 U.S. 589 (1891)). However, the
Supreme Court has noted that “[o]ut of deference to the deep-
rooted policy in favor of the repose of judgments . . . , courts
of equity have been cautious in exercising [this] power.” Id.
(citing United States v. Throckmorton, 98 U.S. 61 (1878)).
Thus, relief from judgment for fraud on the court is “available
7
At the time of Appling, Rule 60(b) contained the language now in
Rule 60(d)(3), preserving the court’s right to set aside a judgment for
fraud on the court.
UNITED STATES V. SIERRA PACIFIC INDUS. 17
only to prevent a grave miscarriage of justice.” United States
v. Beggerly, 524 U.S. 38, 47 (1998).
Our own cases, similarly, have emphasized that “not all
fraud is fraud on the court.” In re Levander, 180 F.3d 1114,
1119 (9th Cir. 1999). “In determining whether fraud
constitutes fraud on the court, the relevant inquiry is not
whether fraudulent conduct ‘prejudiced the opposing party,’
but whether it ‘harmed the integrity of the judicial process.’”
Estate of Stonehill, 660 F.3d at 444 (internal alterations
omitted) (quoting Alexander v. Robertson, 882 F.2d 421, 424
(9th Cir. 1989)). Fraud on the court must be an “intentional,
material misrepresentation.” In re Napster, Inc. Copyright
Litig., 479 F.3d 1078, 1097 (9th Cir. 2007), abrogated on
other grounds by Mohawk Indus., Inc. v. Carpenter, 558 U.S.
100 (2009). Thus, fraud on the court “must involve an
unconscionable plan or scheme which is designed to
improperly influence the court in its decision.” Pumphrey v.
K.W. Thompson Tool Co., 62 F.3d 1128, 1131 (9th Cir. 1995)
(quoting Abatti v. Commissioner, 859 F.2d 115, 118 (9th Cir.
1988)).
In addition, the relevant misrepresentations must go “to
the central issue in the case,” Estate of Stonehill, 660 F.3d at
452, and must “affect the outcome of the case,” id. at 448. In
other words, the newly discovered misrepresentations must
“significantly change the picture already drawn by previously
available evidence.” Id. at 435. In that vein, “[m]ere
nondisclosure of evidence is typically not enough to
constitute fraud on the court, and ‘perjury by a party or
witness, by itself, is not normally fraud on the court’” unless
it is “so fundamental that it undermined the workings of the
adversary process itself.” Id. at 444–45 (quoting In re
Levander, 180 F.3d at 1119). However, perjury may
18 UNITED STATES V. SIERRA PACIFIC INDUS.
constitute fraud on the court if it “involves, or is suborned by,
an officer of the court.” 12 J.W. MOORE, MOORE’S FEDERAL
PRACTICE § 60.21[4][c]; see In re Intermagnetics Am., Inc.,
926 F.2d 912, 917 (9th Cir. 1991). Despite Sierra Pacific’s
arguments to the contrary, our Court and the Supreme Court
have consistently applied this standard for fraud on the court
even in cases involving government attorneys, rather than
creating some different standard for these cases. Beggerly,
524 U.S. at 47; Pizzuto, 783 F.3d at 1181; Estate of Stonehill,
660 F.3d at 449.
Finally, relief for fraud on the court is available only
where the fraud was not known at the time of settlement or
entry of judgment. See, e.g., Hazel-Atlas, 322 U.S. at 244
(allowing relief for “after-discovered fraud); Haeger v.
Goodyear Tire & Rubber Co., 813 F.3d 1233, 1243–45 (9th
Cir. 2016) (analogizing to fraud on the court, where crucial
information was concealed until after settlement and entry of
judgment), overruled on other grounds, 137 S. Ct. 1178
(2017); Pumphrey, 62 F.3d at 1133 (finding fraud on the
court where crucial information was concealed and came to
light after entry of judgment); In re Levander, 180 F.3d at
1120 (same). This limitation arises because issues that are
before the court or could potentially be brought before the
court during the original proceedings “could and should be
exposed at trial.” In re Levander, 180 F.3d at 1120 (citing
Gleason v. Jandrucko, 860 F.2d 556, 560 (2d Cir. 1988)); see
also id. at 1119–20 (explaining that there is no fraud on the
court where “the plaintiff had the opportunity to challenge the
alleged perjured testimony or non-disclosure because the
issue was already before the court”). As the district court
correctly explained, allowing parties to raise issues that
should have been resolved at trial amounts to collateral attack
UNITED STATES V. SIERRA PACIFIC INDUS. 19
and undermines “the deep rooted policy in favor of the repose
of judgments.” Hazel-Atlas, 322 U.S. at 244.
The decision in Hazel-Atlas does not undermine this
principle, despite the Defendants’ argument that the moving
party in that case had some knowledge of the fraud prior to
trial and settlement. First, as we have already noted, the
Court’s opinion in Hazel-Atlas specifically stated that relief
is available for “after-discovered fraud.” Id. And second, the
majority opinion in Hazel-Atlas explained that Hazel-Atlas
Glass Company had indeed attempted to uncover the
suspected fraud before trial, but it had been thwarted by a
witness who blatantly lied about the relevant issue. Id. at
242–43. After settlement and entry of judgment, it came to
light that the witness had been contacted by Hartford-
Empire’s attorneys shortly before he lied to Hazel-Atlas’s
attorneys, and that Hartford-Empire had compensated the
witness shortly thereafter with an $8,000 payment for his lie.
Id. Thus, the key information in Hazel-Atlas was revealed
only after entry of judgment, ultimately supporting the
proposition that relief is available only for fraud discovered
after judgment is entered.
Similarly, despite some earlier language suggesting
otherwise, see Pumphrey, 62 F.3d at 1133, our decision in
Appling v. State Farm clarified that where the moving party
“through due diligence could have discovered” the alleged
perjury or non-disclosure, such fraud does “not disrupt the
judicial process” and thus does not constitute fraud on the
court. 340 F.3d at 780. Thus, a finding of fraud on the court
is reserved for material, intentional misrepresentations that
could not have been discovered earlier, even through due
diligence.
20 UNITED STATES V. SIERRA PACIFIC INDUS.
B
Under the standard described above, the district court
properly concluded that Sierra Pacific cannot demonstrate
fraud on the court regarding any of the alleged fraud it
discovered before settlement. In addition to the fact that
these allegations do not constitute “after-discovered fraud,”
Hazel-Atlas, 322 U.S. at 244, Sierra Pacific had explicitly
stated its intention to raise the alleged fraud at trial, and the
court’s in limine ruling permitted it “to introduce evidence
that there was an attempt to conceal information from the
public or the defense.” Thus, “the plaintiff had the
opportunity to challenge the alleged perjured testimony or
non-disclosure because the issue was already before the
court,” In re Levander, 180 F.3d at 1119–20, and these
allegations cannot be grounds for subsequent relief after
Sierra Pacific voluntarily settled instead of going to trial.8
The district court therefore did not abuse its discretion in
finding that there was no fraud on the court related to the
photographs, sketches, and investigator testimony about the
white flag; the aerial video and erroneous expert report; the
misconduct at the lookout tower; the government’s interview
with the Howell employee; the other fires allegedly started by
Howell; or the lack of an arson investigation.
8
Hazel-Atlas does not undermine this conclusion because, unlike in
that case where the plaintiffs tried and failed to gain information about the
fraud before trial, the Defendants here received numerous documents
through discovery that allegedly demonstrated fraud, and they were
prepared to present this evidence at trial.
UNITED STATES V. SIERRA PACIFIC INDUS. 21
C
Nor do the instances of alleged fraud discovered after
settlement constitute actionable fraud on the court warranting
Rule 60 relief. To begin with, the district court correctly
noted that the express settlement terms appear to preclude any
relief, even for newly discovered facts or evidence. In
agreeing that the “Settlement Agreement . . . shall remain in
full force as a complete release of Unknown Claims
notwithstanding the discovery or existence of additional or
different claims or facts before or after the date of this
Settlement Agreement,” it appears that the Defendants bound
themselves not to seek future relief, even for fraud on the
court. Thus, the district court did not abuse its discretion by
finding that relief is precluded on this ground.
Even if the terms of the settlement agreement did not bar
relief, the district court properly concluded that relief is
unwarranted because the allegations of after-discovered fraud
fail to rise to the level of fraud on the court. The Defendants
allege three instances of alleged fraud or misrepresentation
that they did not discover until after settlement. They argue
that each of these allegations demonstrates fraud on the court,
and that the district court erred by failing to assume the truth
of the allegations, given its specific instructions that the
parties brief only the legal sufficiency of the Defendants’
22 UNITED STATES V. SIERRA PACIFIC INDUS.
claims. Yet, even assuming the truth of these allegations,9 we
conclude that they do not constitute fraud on the court.10
1
First, the Defendants have consistently alleged that
Investigators White and Reynolds testified falsely about their
investigation of the fire’s origin, specifically regarding the
white flag that allegedly marked the initial “concealed” point
of origin. The only allegation of after-discovered fraud
regarding this dispute is the Defendants’ new allegation that
the government attorneys actually suborned this perjury by
instructing White and Reynolds to lie in their testimony.11
During his deposition in the state case, Reynolds mentioned
a January 2011 meeting in which the government attorneys
spoke with the fire investigators and told them that the issue
of the white flag was likely to come up and that the attorneys
“saw it as a nonissue.” According to the Defendants, this
language is tantamount to the attorneys telling the
9
Because we conclude that these allegations do not demonstrate fraud
on the court even if taken as true, we need not decide whether the district
court erred in failing to assume their truth.
10
The Defendants also argue that the district court erred by requiring
that they act with diligence in attempting to discover the alleged fraud
before trial, and that the court made clearly erroneous findings of fact as
to whether the Defendants had been diligent. Because none of the alleged
instances of fraud rise to the level of fraud on the court regardless of the
Defendants’ diligence, we need not and do not reach this issue.
11
As the Defendants conceded in the district court, they had received
the photographs of the white flag and the earlier point of origin sketch
during discovery, and the Defendants questioned White and Reynolds
extensively about the white flag during their lengthy depositions.
UNITED STATES V. SIERRA PACIFIC INDUS. 23
investigators to conceal any relevant information about the
white flag.
Assuming the truth of the Defendants’ allegation on this
point,12 Reynolds’ testimony still does not establish that the
investigators were instructed to lie. The attorneys’ comment
that they saw the white flag as a “nonissue” is merely an
opinion about the relative importance of an element of the
case; it is not an instruction to commit perjury. As the
government accurately notes, it is not fraud on the court for
a party’s attorneys to have their own theory of the case and
discuss it with their witnesses. Moreover, the Defendants
knew about this meeting before settlement, as Reynolds had
explained in his deposition in the federal case that the
investigators had met with the attorneys and had discussed
the insignificance of the white flag. The slightly different
language used by Reynolds in his state deposition did not
“significantly change the picture already drawn by previously
available evidence,” Estate of Stonehill, 660 F.3d at 435, nor
does it demonstrate that any “grave miscarriage of justice”
occurred, Beggerly, 524 U.S. at 47. Accordingly, the district
court did not abuse its discretion by denying relief on this
ground.
2
The Defendants’ second allegation of after-discovered
fraud is that the government failed to disclose Edwin Bauer’s
accusation that Sierra Pacific’s legal counsel had offered him
a bribe to say that his son started the fire. According to the
12
It was proper for the district court to consider the transcript of
Reynolds’s deposition that included the “nonissue” comment, which the
Defendants filed with the district court in support of their Rule 60 motion.
24 UNITED STATES V. SIERRA PACIFIC INDUS.
Defendants, this information constituted exculpatory evidence
as to the Defendants because it suggests that Edwin Bauer
was trying to point investigators away from his son, who may
have actually started the fire, by claiming that his son was
asked to falsely confess in exchange for a bribe. The
Defendants argue that, by withholding this information, the
government secured a “critical” in limine ruling limiting the
evidence that the Defendants could present regarding its arson
theory. The Defendants also contend that the district court
failed to accept as true its allegation that this in limine ruling
prejudiced the Defendants.
We uphold the district court’s conclusion that relief was
unwarranted on these grounds. To begin with, it was not
error for the district court to look at the content of the earlier
in limine rulings and conclude that the Defendants were not
prejudiced by these rulings. In the analogous context of a
motion to dismiss, a court can consider matters of public
record even when assuming the truth of the allegations,
United States v. 14.02 Acres of Land More or Less in Fresno
Cty., 547 F.3d 943, 955 (9th Cir. 2008), and the district court
here was likewise permitted to consider the record of earlier
proceedings even when assuming the truth of the Defendants’
allegations. The court’s oral discussion of the in limine ruling
specifically explained that the Defendants would be permitted
to present evidence that Bauer was “near the scene, seen by
witnesses, and there was no follow-up.” The Defendants thus
overstate the impact of the in limine ruling that was allegedly
secured through the government’s nondisclosure of the bribe
allegation, as the Defendants were still allowed to present
evidence relating to its arson theory. Moreover, the district
court expressly stated that this ruling was subject to
reconsideration during trial. In this context, it was not clearly
UNITED STATES V. SIERRA PACIFIC INDUS. 25
erroneous for the district court to find that the Defendants
were not prejudiced by the ruling.
Next, because the district court correctly concluded that
Brady does not generally apply in civil proceedings, see Dist.
Attorney’s Office for Third Judicial Dist. v. Osborne,
557 U.S. 52, 69 (2009); Fox ex rel. Fox v. Elk Run Coal Co.,
739 F.3d 131, 138–39 (4th Cir. 2014), the government did not
have a specific duty to disclose the false bribe information,
beyond its standard discovery obligations. Under the high
standard for a Rule 60(d)(3) motion, a mere discovery
violation or non-disclosure does not rise to the level of fraud
on the court. Appling, 340 F.3d at 780. In addition, the
Defendants could have obtained this information by
interviewing Edwin Bauer on their own. See Fed. R. Civ. P.
26(b)(1) (allowing consideration of “the parties’ relative
access to relevant information” in determining discovery
obligations).
Furthermore, despite the Defendants’ confidence in the
probative value of the false bribe accusation, the
government’s failure to disclose this information “do[es] not
significantly change the story as presented to the district
court” prior to settlement, given that the Defendants already
possessed other circumstantial evidence of arson. Estate of
Stonehill, 660 F.3d at 452. For all of these reasons, the
district court did not abuse its discretion by denying relief on
this ground.
3
The Defendants’ third allegation is that the government
committed fraud on the court by misrepresenting the true
nature of Cal Fire’s WiFITER fund, which was later
26 UNITED STATES V. SIERRA PACIFIC INDUS.
determined by the California State Auditor to be structured
such that it was “open to possible misuse.” The Defendants
allege that, because the WiFITER fund was not subject to
adequate oversight, the funds were used improperly to send
Cal Fire investigators to luxury retreats and purchase
expensive equipment. The Defendants concede that Cal
Fire’s Investigator White had no contingent financial interest
in the outcome of the federal case currently before us,
because none of the federal recovery was destined for the
WiFITER fund, but they argue that White’s contingent
interest in the outcome of the state case tainted the entire fire
investigation on which both cases relied.
Because our case law requires that a party show willful
deception rather than simply reckless disregard for the truth,
e.g., Napster, 479 F.3d at 1097, White’s contingent financial
interest only rises to the level of fraud on the court if the
government knew about White’s interest and wilfully
concealed it. Here, the United States’ only affirmative
representations about the nature of the WiFITER fund were
that it was “a separate public trust fund to support
investigator training and to purchase equipment for
investigators” and that it was “a public program established
to train and equip fire investigators.” The Defendants
admitted in the district court that they had no evidence that
the United States knew of the improper nature of the
WiFITER fund; the Defendants alleged only that the
government had a duty to fully investigate any agency it was
working with and root out any improper motives.13 The
Defendants now argue that Cal Fire’s knowledge of the
fund’s impropriety should be imputed to the United States
13
Indeed, a 2009 internal audit report had failed to reveal any
problems with the WiFITER fund.
UNITED STATES V. SIERRA PACIFIC INDUS. 27
due to the two entities’ joint prosecution agreement, but the
Defendants waived this argument by failing to raise it below.
Padgett, 587 F.3d at 985 n.2.
Similarly, the United States could not have had a duty to
disclose documents that it did not possess relating to the
WiFITER fund. The United States represented to the district
court that it did not know about or have access to any
documents demonstrating the true nature of the fund, and the
district court ruled that the Defendants would have to
subpoena any such documents from Cal Fire. The
Defendants have not challenged the United States’
representation that it did not possess these documents. The
Defendants have therefore failed to show that the United
States knew about the fund’s improprieties and made
“intentional, material misrepresentation[s]” on this point.
Napster, 479 F.3d at 1097. Accordingly, the district court did
not abuse its discretion by denying relief on this ground.
4
Finally, the Defendants argue that the district court failed
to consider the totality of the United States’ conduct, which
the Defendants label a “trail of fraud.” See Hazel-Atlas,
322 U.S. at 250. Contrary to the district court’s assertion that
“the whole can be no greater than the sum of its parts,” a long
trail of small misrepresentations—none of which constitutes
fraud on the court in isolation—could theoretically paint a
picture of intentional, material deception when viewed
together. Nonetheless, the instances of possible
misinformation in this case do not constitute fraud on the
court within the meaning of Rule 60, because almost all of the
evidence of alleged fraud was received by the Defendants
through discovery and thus was known to them when they
28 UNITED STATES V. SIERRA PACIFIC INDUS.
made the decision to settle. The three instances of alleged
fraud that came to light after settlement, even when viewed
together, do not “significantly change the picture already
drawn by previously available evidence.” Stonehill, 660 F.3d
at 435. Therefore, the district court did not abuse its
discretion by denying relief based on the totality of the
circumstances.
5
In sum, none of the allegations of after-discovered fraud,
either individually or as a whole, establish that the
government committed fraud on the court within the meaning
of Rule 60. Accordingly, the district court did not err in
denying the Defendants’ motion for relief for judgment under
Rule 60(d)(3).
III
The Defendants argue that the district court judge
assigned to the Rule 60 motion should be recused because of
an appearance of bias created by activity on a Twitter account
that does not bear his name, but is allegedly controlled by
him. As explained above, the Defendants could have raised
this issue in the district court following either of the disputed
Twitter account’s pre-judgment tweets. Because they failed
to do so, plain error review applies. Spangle, 626 F.3d 495.
The Defendants also filed a motion for judicial notice and a
motion for leave to supplement their reply brief with further
information regarding the contents of this Twitter account and
other related documents. We deny both motions as moot
because, under the plain error standard, the allegations do not
warrant retroactive recusal even if the judge is the owner of
the account.
UNITED STATES V. SIERRA PACIFIC INDUS. 29
The Code of Conduct for United States Judges “prescribes
ethical norms for federal judges as a means to preserve the
actual and apparent integrity of the federal judiciary.” United
States v. Microsoft Corp., 253 F.3d 34, 111 (D.C. Cir. 2001).
To this end, Canon 2 of the Code instructs judges to “avoid
impropriety and the appearance of impropriety in all
activities.” Canon 3A(4) prohibits ex parte communications
or any “communications concerning a pending or impending
matter that are made outside the presence of the parties or
their lawyers,” and Canon 3A(6) provides that “[a] judge
should not make public comment on the merits of a matter
pending or impending in any court.”14 Canon 3C instructs
that a judge must disqualify himself or herself in a proceeding
where his or her impartiality could reasonably be questioned,
mirroring the provision of 28 U.S.C. § 455(a) which
mandates that a United States judge “shall disqualify himself
in any proceeding in which his impartiality might reasonably
be questioned.” The test for recusal under these provisions is
“an objective test based on public perception.” United States
v. Holland, 519 F.3d 909, 913 (9th Cir. 2008).
The Defendants argue that the judge’s alleged
“following” of the U.S. Attorney’s office on Twitter created
an appearance of bias, in violation of Canon 2, and
constituted an ex parte communication, in violation of Canon
3A(4). They also argue that the judge’s alleged tweet on the
evening of his ruling created a further appearance of bias and
constituted an impermissible public comment on the
substance of a pending case (given the impending appeal),
violating Canon 3A(6). Because of these violations, the
14
For purposes of this rule, pending matters include those that have
been resolved by the court or judge in question but remain pending on
appeal. Code of Conduct for United States Judges cmt. 3A(6).
30 UNITED STATES V. SIERRA PACIFIC INDUS.
Defendants argue that the judge was required to recuse
himself under Canon 3C and 28 U.S.C. § 455(a). Even
assuming that the judge owned or controlled the disputed
Twitter account, these arguments fail.
The claim that an unknown account, not identified with a
judge or the judiciary, followed a public Twitter account
maintained by the U.S. Attorney does not provide a basis for
recusal here. As we know, Twitter is a news and social
networking service where users post comments, restricted to
140 characters, in “tweets.” A Twitter account holder may
“follow” other Twitter account holders, meaning that the
“following” user will receive all of the tweets generated by
the other user. Some Twitter users restrict their posts to a
private audience. But news organizations, celebrities, and
even high-up government officials use Twitter as an official
means of communication, with the message intended for wide
audiences. Thus, without more, the fact that an account
holder “follows” another Twitter user does not evidence a
personal relationship and certainly not one that, without more,
would require recusal.15 Thus, assuming the account
belonged to the district judge, the judge did not plainly err in
15
Of course, there are circumstances in which use of social media
may create concern. For example, the Judicial Conference of the United
States’ Committee on Codes of Conduct has issued an opinion noting that
“identifying oneself as a ‘fan’ of an organization” on social media may
create the appearance of impropriety. Comm. on Codes of Conduct,
Advisory Opinion 112. The ABA’s formal opinion on social media
similarly notes that a “judge must be mindful that [an electronic social
media] connection may give rise to the level of social relationship or the
perception of a relationship that requires disclosure or recusal.” ABA
Formal Opinion 462 (Feb. 21, 2013) (emphasis added). Nothing suggests
that following a Twitter account under the circumstances here rises to the
level of creating an appearance of impropriety.
UNITED STATES V. SIERRA PACIFIC INDUS. 31
not recusing himself because he “followed” the U.S.
Attorney’s office on Twitter.16
For similar reasons, the fact that the Twitter account
“followed” the U.S. Attorney does not mean that the public
tweets published by the U.S. Attorney constituted improper
ex parte communications. The relevant opinion from the
Committee on Codes of Conduct explains that concerns of
improper communication arise in the context of “the
exchange of frequent messages, ‘wall posts,’ or ‘tweets’
between a judge or judicial employee and a ‘friend’ on a
social network who is also counsel in a case pending before
the court.” Comm. on Codes of Conduct Advisory Opinion
112. The situation in the current case, however, does not
present the type of circumstance that the Committee warned
against in its opinion. Here, none of the challenged tweets
were specifically directed from the U.S. Attorney to the
judge, nor have the Defendants alleged that there were any
personally directed tweets. Thus, the public tweets did not
constitute communication from the U.S. Attorney to the
judge. Rather, the relevant tweets from the U.S. Attorney’s
account constituted news items released to the general public,
intended for wide distribution to an anonymous public
audience. Under the circumstances, the social media activity
alleged to have occurred in this case did not constitute
prohibited ex parte communication.
16
As explained above, the Defendants could have raised this issue in
the district court following either of the pre-judgment tweets. Doing so
would have allowed a full development of the record. However, because
the Defendants’ failed do so, plain error review applies. Spangle,
626 F.3d 495.
32 UNITED STATES V. SIERRA PACIFIC INDUS.
Finally, the Defendants also allege that the judge’s action
in tweeting the link to an allegedly erroneous news article
requires recusal. Assuming the challenged tweet was from
the judge’s account, it still does not warrant retroactive
recusal in this case. The tweet consisted only of the title and
link to a publicly available news article about the case in a
local newspaper, without any further commentary. Under the
standard of review applicable at this stage, the district judge
did not plainly err in not recusing himself because he tweeted
the link to this news article.
The Defendants rely heavily on United States v. Microsoft
Corp., 253 F.3d at 107, but in fact the conduct in Microsoft
was far more problematic: the judge in that case had given
numerous secret interviews to the press, in which he spoke
extensively about his views on the merits of the case. Id. at
107–11. Even in In re Boston’s Children First, which the
Defendants cite for the proposition that a violation of Canon
3A(c) requires recusal for even the appearance of partiality,
the judge had expressed her own views about the case in a
published letter to the editor and an interview with a reporter.
244 F.3d 164, 166 (1st Cir. 2001). Here, in contrast, the
tweets allegedly posted by the judge expressed no opinion on
the case or on the linked news articles. Although “the
analysis of a particular section 455(a) claim must be guided,
not by comparison to similar situations addressed by prior
jurisprudence, but rather by an independent examination of
the unique facts and circumstances of the particular claim at
issue,” Holland, 519 F.3d at 913, these cases nonetheless help
put the circumstances of the current case in context.
Under the facts and circumstances present here, the single
challenged tweet does not amount to “public comment on the
merits of a [pending] matter” in violation of Canon 3A(6).
UNITED STATES V. SIERRA PACIFIC INDUS. 33
Even if the judge’s choice of the particular article he posted
and its allegedly inaccurate title could be construed as public
commentary, as the Defendants argue, not every violation of
the Code of Conduct creates an appearance of bias requiring
recusal under § 455(a). Microsoft, 253 F.3d at 114–15. Here,
the three relevant tweets—containing only links to news
articles, and coming from an account not publicly identifying
a member of the judiciary—do not create an appearance of
bias such that recusal is warranted under § 455(a).
For these reasons, under the plain error standard we
conclude that there was no appearance of bias created by the
instances of alleged conduct in this case, so retroactive
recusal is not warranted. Vacatur of the district court’s order
is therefore also unwarranted. Nonetheless, this case is a
cautionary tale about the possible pitfalls of judges engaging
in social media activity relating to pending cases, and we
reiterate the importance of maintaining the appearance of
propriety both on and off the bench.
IV
In deference to the longstanding policy in favor of the
repose of judgments, courts have consistently required a very
high showing for relief for judgment on the basis of fraud on
the court. After voluntarily settling this case and asking the
district court to enter judgment based on that settlement, the
Defendants’ allegations of newly discovered fraud fail to
meet this high standard. We therefore affirm the district
court’s denial of the Defendants’ motion for relief from
34 UNITED STATES V. SIERRA PACIFIC INDUS.
judgment under Rule 60(d)(3), and we decline to order
vacatur or direct retroactive recusal.17
AFFIRMED.
17
In making this decision, we do not express any opinion as to the
veracity of either party’s factual assertions, attempt to decide any of the
underlying issues, or express any opinion as to the troubling issues
discussed in the state court opinion. Nor do we make any findings as to
the alleged use of the judge’s Twitter account, which was an issue
undeveloped in the district court. Those questions must be resolved, if at
all, in another forum.