Giasson Aerospace Sci. Inc., et al. v. RCO Eng’g Inc., No. 16-1769 (GRIFFIN, Norris, Suhrheinrich).

Giasson Aerospace Sci. Inc., et al. v. RCO Eng’g Inc., No. 16-1769 (GRIFFIN, Norris, Suhrheinrich).

Giasson and RCO were in business together, trying to secure a contract to sell airline seats to a luxury jet manufacturer. Giasson sued RCO after RCO allegedly cut Giasson out of the deal, and the parties settled for a fixed amount, determined in part on RCO’s estimation of its gross sales price per seat. After settlement, Giasson learned that RCO had increased its gross sales price on two kinds of seats, and thereafter sued RCO claiming fraud in the inducement. Giasson argued that its claim should proceed as an independent action in equity for relief from judgment under Federal Rule of Civil Procedure 60(d)(1). The district court dismissed the claim pursuant to Fed. R. Civ. P. 12(b)(6), and Giasson appealed.

The Sixth Circuit affirmed dismissal, noting at the outset that parties claiming fraud or misrepresentation normally attack a judgment under Rule 60(b)(3), but such an action must be brought within one year. Because Giasson brought this claim four years later, it had to claim an independent action under Rule 60(d)(1). Relying on U.S. Supreme Court and Circuit precedent, the Court held that relief from judgment pursuant to Rule 60(d)(1) is only available “under unusual and exception circumstances to prevent a grave miscarriage of justice.” The Court emphasized that the policy behind that strictness—the “repose of judgments”—was especially strong when the judgment was the result of a settlement agreement. The Court found that Giasson’s claim that it had received less-than-ideal royalty payments because of a misrepresentation simply did not involve the kind of injustice necessary for relief under Rule 60(d)(1), especially when Giasson was a sophisticated, represented party.