Kenneth W. Brown v. Securities and Exchange Commission, et al.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 15-13099
Non-Argument Calendar
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D.C. Docket No. 9:13-cv-81307-KAM
KENNETH W. BROWN,
Plaintiff-Appellant,
versus
SECURITIES AND EXCHANGE COMMISSION,
CHRISTOPHER E. MARTIN,
Defendants-Appellees.
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Appeal from the United States District Court
for the Southern District of Florida
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(March 2, 2016)
Before ED CARNES, Chief Judge, WILSON and ROSENBAUM, Circuit Judges.
PER CURIAM:
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Kenneth Brown appeals the district court’s dismissal of his pro se complaint
alleging that the Securities and Exchange Commission and its attorney,
Christopher Martin, engaged in fraud on the court when the SEC prevailed in a
lawsuit against him for securities fraud. After giving Brown two opportunities to
amend his complaint, the district court dismissed it with prejudice for failing to
sufficiently plead a basis for an independent action under Federal Rule of Civil
Procedure 60(d). The district court was right to do so.
In 2007 the SEC, represented by Martin, won in a civil suit against Brown
for securities fraud. Unhappy with that result, Brown filed an independent action
requesting monetary damages, which alleged that the SEC and Martin had engaged
in various bad acts during the trial. Brown later amended his complaint, alleging
the same facts but replacing his request for monetary damages with a request that
the court relieve him from the 2007 judgment. The defendants moved to dismiss
his amended complaint and the district court granted the motion, dismissing the
amended complaint without prejudice for failing to plead the facts required to
sustain an independent action under Rule 60(d).1 The court, however, granted
Brown leave to amend his complaint a second time, with the warning that it would
dismiss his complaint with prejudice if he failed to demonstrate that: (1) equitable
1 The district court also dismissed Martin as a defendant, explaining that, as an attorney
instead of a party in the 2007 trial, Brown could not obtain equitable relief from him. But Brown
added Martin back in his second amended complaint and the district court’s dismissal of that
complaint did not revisit the propriety of naming Martin as a defendant.
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reasons existed for maintaining an independent action to set aside the judgment
and (2) the defendants’ actions in the 2007 action rose to the level of fraud on the
court.
Brown filed a second amended complaint, in which he alleged that the SEC
and Martin used “unconscionable litigation tactics, abuse of power and
prosecutorial misconduct to bring ‘fraud on the court’ to obtain [an] inequitable
judgment.” He asserted that they made false statements, submitted false
documents, suborned perjury, and withheld information from the court. He also
asserted that he was innocent and that the trial judge decided the case against him
because the judge was biased. The district court dismissed Brown’s second
amended complaint, finding that his allegations failed to rise to the level of fraud
on the court because it was Brown’s responsibility to expose at trial any false
evidence, perjury, or undisclosed evidence; his allegations of innocence were
simply an attempt to relitigate issues that had already been decided; and his claim
that the trial judge had been biased was a claim of fraud by the court, not fraud on
the court. The court concluded that any further attempts to amend the complaint
would be futile, and it dismissed the case with prejudice. Brown timely appealed.
Brown first contends that the district court’s order precludes meaningful
appellate review because it is devoid of factual findings or a sufficient basis in
legal reasoning. That is plainly untrue. The court described Brown’s allegations
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and explained its reasons for concluding that they failed to rise to the level of fraud
on the court. That is all it needed to do.
Brown’s next contention is that his second amended complaint sufficiently
pled fraud on the court, so the district court erred in dismissing it. Rule 60(d)(1)
“preserves a court’s historical equity power to ‘entertain an independent action to
relieve a party from a judgment, order, or proceeding.’” Aldana v. Del Monte
Fresh Produce N.A., Inc., 741 F.3d 1349, 1359 (11th Cir. 2014) (quoting Rule
60(d)(1)). The elements of an independent action under Rule 60(d)(1) are:
(1) a judgment which ought not, in equity and good conscience, [] be
enforced; (2) a good defense to the alleged cause of action on which
the judgment is founded; (3) fraud, accident, or mistake which
prevented the defendant in the judgment from obtaining the benefit of
his defense; (4) the absence of fault or negligence on the part of
defendant; and (5) the absence of any remedy at law.
Travelers Indem. Co. v. Gore, 761 F.2d 1549, 1551 (11th Cir. 1985) (discussing
the predecessor to Rule 60(d)). A party “cannot use an independent action as a
vehicle for the relitigation of issues.” Id. at 1552.
Rule 60(d)(3) provides that a court can “set aside a judgment for fraud on
the court.” We have defined “fraud on the court” as “that species of fraud which
does or attempts to, defile the court itself, or is a fraud perpetrated by officers of
the court so that the judicial machinery cannot perform in the usual manner its
impartial task of adjudging cases that are presented for adjudication.” Travelers
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Indem. Co., 761 F.2d at 1551 (citation omitted). But “[f]raud inter parties, without
more, should not be fraud upon the court.” Id. (citation omitted).
Taking as true Brown’s assertions, the thrust of his allegations are fraud by
the SEC on him in the litigation, and his complaint amounts to an attempt to
relitigate the unfavorable 2007 judgment. See id. at 1551; see also id. at 1552
(“Plaintiff’s argument that [the defendant] obtained his judgment in the original
trial by use of perjured testimony to support its motion for relief in this action is an
attempt to relitigate the credibility of a witness, an issue that was necessarily
decided in the original trial.”). Brown’s allegation that attorney Martin, as an
officer of the court, engaged in those nefarious deeds is utterly conclusory.
Ashcroft v. Iqbal, 556 U.S. 662, 678 129 S. Ct. 1937, 1949 (2009) (stating that
“[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice” to defeat a motion to dismiss). Likewise,
his allegation that the trial court was biased is conclusory and, in any event, is yet
another attempt to relitigate the 2007 trial. See id.; Traveler’s Indem. Co., 761
F.2d at 1552. The district court properly dismissed Brown’s complaint seeking
Rule 60(d) relief.
AFFIRMED.
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