Floorgraphics Inc. v. News America Marketing In-Store Services, Inc.

434 F. App'x 109
CourtCourt of Appeals for the Third Circuit
DecidedApril 20, 2011
Docket10-2721
StatusUnpublished
Cited by21 cases

This text of 434 F. App'x 109 (Floorgraphics Inc. v. News America Marketing In-Store Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Floorgraphics Inc. v. News America Marketing In-Store Services, Inc., 434 F. App'x 109 (3d Cir. 2011).

Opinion

OPINION

SMITH, Circuit Judge.

In 2004, Floorgraphics, Inc. (FGI), a company that “pioneered the use of floor advertising in retail grocery stores,” filed suit against, inter alia, News America Marketing In-Store Services, Inc., and News America Marketing In-Store, Inc. (collectively News). FGI asserted federal claims under the Computer Fraud & Abuse Act and the Lanham Act, as well as ten state law claims alleging that News had engaged in unfair competition. After protracted discovery and the denial of cross-motions for summary judgment, a jury trial commenced on March 3, 2009, before United States District Judge Anne Thompson. On March 10, in the midst of trial, the parties settled the case and the jury was discharged. The parties executed a Mutual Release. Although the Mutual Release did not provide for an exchange of consideration, it did reference the fact that the parties were contemporaneously executing an Asset Purchase Agreement, Goodwill Purchase Agreements with the majority stockholders, Non-Compete and Non-Solicitation Agreements, as well as Consulting Agreements. Pursuant to the terms of these agreements, FGI, its principals and its majority shareholders received a total of $29.5 million.

On March 9, 2010, a day shy of the one year anniversary of FGI’s settlement with News, FGI filed a motion seeking relief from judgment under Federal Rule of Civil Procedure 60(b)(2), (3), and (6). FGI filed the motion “because it ha[d] recently learned of a substantial body of evidence that was produced by [News] in separate litigation, [i.e., the federal antitrust action of Valassis Communications, Inc. v. News America, Inc., No. 06-10240 (E.D.Mich.) ], which appears critically important to FGI’s claims and should have been — but was not — produced in this matter.” It cited a number of video recordings of meetings of News’ executives, which pertained to News’ competition with FGI and other companies in the advertising market for consumer goods. FGI also explained that it had discovered that “budget books,” *111 which it had requested during discovery and which had not been produced, had been provided to Valassis. “Given the serious and troubling implications of these recent revelations, FGI [sought] relief to gain access to critical evidence [News] failed to produce in discovery and to protect the integrity of the judicial process.”

News opposed the Rule 60(b) motion and moved to enforce the terms of the Mutual Release. It asserted, inter alia, that the material FGI cited in its motion fell into three categories: (1) material not encompassed by FGI’s discovery requests; (2) material that FGI may have sought initially, but failed to pursue once News objected to the request; or (3) material that had not been produced in light of the Magistrate Judge’s order denying FGI’s discovery request.

During oral argument before Judge Thompson, FGI advised that the “primary reason” for its motion was that videos of News’ CEO, Paul Carlucci, showed that he “said things that are directly contradictory to the [deposition] testimony that he gave in this case.” FGI further asserted that News’ failure to provide the video of Mr. Carlucci effectively foreclosed FGI from presenting its claim. After hearing from both parties, Judge Thompson denied the motion and concluded the hearing by stating that she did not “believe that it would be just to grant a 60(b) motion in this case.” A timely notice of appeal followed, challenging the denial of relief under only 60(b)(2) and (3). 1

Rule 60(b) provides that the “court may relieve a party ... from a final judgment, order, or proceeding for the following reasons: ... (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); [and] (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party[.]” Fed.R.Civ.P. 60(b)(2) and (3). In Compass Technology, Inc. v. Tseng Laboratories, Inc., 71 F.3d 1125, 1130 (3d Cir.1995), we instructed that Rule 60(b)(2) “requires that the new evidence (1) be material and not merely cumulative, (2) could not have been discovered before trial through the exercise of reasonable diligence and (3) would probably have changed the outcome of the trial. Any party requesting such relief ‘bears a heavy burden.’ ” Id. (citations omitted).

Unlike Rule 60(b)(2), 60(b)(3) does not provide much guidance regarding its application. We have declared general principles applicable to a 60(b)(3) motion. For example, in Brown v. Pennsylvania Railroad Company, 282 F.2d 522 (3d Cir.1960), we stated that “[i]n order to sustain the burden of proving fraud and misrepresentation under Rule 60(b)(3), the evidence must be clear and convincing.” Id. at 527. See also Anderson v. Cryovac, Inc., 862 F.2d 910, 923 (1st Cir.1988) (noting need for “clear and convincing evidence” under 60(b)(3)). In Seaboldt v. Pennsylvania Railroad Company, 290 F.2d 296, 299 (3d Cir.1961), we recognized that relief under Rule 60(b)(3) may be warranted, even though the newly disclosed evidence may not change the result, if such evidence “would have made a difference” in advancing the moving party’s claim. Distilling these cases in Stridiron v. Stridiron, 698 F.2d 204 (3d Cir.1983), we instructed that “[t]o prevail [under Rule 60(b)(3) ], the movant must establish that [1] the adverse party engaged in fraud or other misconduct, and [2] this conduct prevented the *112 moving party from fully and fairly presenting his case.” Id. at 207. 2

After reviewing the record before us, we conclude that the District Judge did not abuse her discretion by denying FGI’s motion for relief under Rule 60(b)(3). First, after scrutinizing Carlucci’s deposition and the 2002 Carlucci video, we conclude that FGI did not establish perjury warranting relief under Rule 60(b)(3). Second, discovery misconduct cannot be based on News’ failure to produce the budget books inasmuch as the discovery request was objected to and FGI’s motion to compel was denied by the Magistrate Judge.

FGI also based its claim of discovery misconduct on News’ failure to produce eleven videotapes in response to FGI’s Request for Production of Documents No. 20. In Stridiron, we observed that a failure to ... produce evidence requested in discovery can constitute Rule 60(b)(3) misconduct.” 698 F.2d at 207(emphasis added).

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434 F. App'x 109, Counsel Stack Legal Research, https://law.counselstack.com/opinion/floorgraphics-inc-v-news-america-marketing-in-store-services-inc-ca3-2011.