Although Mediator Had A Duty To Disclose Dealings With One Of The Firms In The Litigation, Relief From Judgment Was Inappropriate Under Rule 60(b)

In CEATS, Inc. v. Continental Airlines, Inc., No. 13-1529 (Fed. Cir. June 24, 2014), the Federal Circuit affirmed the district court's finding that relief from judgment under Fed. R. Civ. P. 60(b) was not warranted.

CEATS, Inc. ("CEATS") sued Continental Airlines, Inc., Alaska Airlines, Inc., Horizon Air Industries, Inc., Delta Airlines, Inc., Jetblue Airways Corp., United Airlines, Inc., Virgin America, Inc., US Airways, Inc., Ticketmaster, LLC., Ticketsnow.com, Inc., Live Nation Worldwide, Inc., and Airtran Airways, Inc. (collectively "Continental") for patent infringement. The case went to trial after the parties failed to reach a settlement during court-ordered mediation. The jury found CEATS's patents were infringed but invalid, which the Federal Circuit affirmed in an earlier appeal. While the earlier appeal was pending, CEATS sought relief from the judgment, pursuant to Rule 60(b), based on a purported relationship between the court-appointed mediator, former Magistrate Judge Robert Faulkner, and the law firm representing some, but not all, of the accused infringers, Fish & Richardson P.C. ("Fish"). CEATS contended that it discovered the relationship because of a news article related to a suit against Faulkner and Fish resulting from a separate litigation ("the Karlseng litigation"). After the Federal Circuit affirmed the invalidity of CEATS's patents, the district court denied the Rule 60(b) motion, and CEATS appealed.

On appeal, the Federal Circuit did not find persuasive CEATS's arguments that the district court abused its discretion by not granting relief under both Rule 60(b)(3)—due to Fish's failure to disclose the facts surrounding the Karlseng litigation—and under Rule 60(b)(6)—for Faulkner's failure to disclose the facts surrounding the Karlseng litigation and the Karlseng litigation itself. With respect to Rule 60(b)(3), the Court explained that the party seeking relief "must prove by clear and convincing evidence '(1) that the adverse party engaged in fraud or other misconduct, and (2) that this misconduct prevented the moving party from fully and fairly presenting his case.'" Slip op. at 8 (quoting Hesling v. CSX Transp., Inc., 396 F.3d 632, 641 (5th Cir. 2005)). Because CEATS conceded that there was nothing in the record showing that it was not given a full and fair opportunity to present its case and due to the Federal Circuit's limitation to the record before it, the Court affirmed the district court's finding that...