United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
Hon.
Patti B. Saris Chief United States District Judge
Plaintiff
John Doe sued three physicians (Dr. Kinan K. Hreib, Dr.
Stephen E. Southard, and Dr. Daniel P. McQuillen) and Lahey
Clinic, Inc. (“Lahey”) for failure to properly
and timely diagnose his HIV infection, which resulted in the
spread of the infection and permanent physical and mental
damage. A jury found Dr. Hreib and Dr. Southard (“the
doctors”) liable for negligence and awarded Doe $18.4
million in compensatory damages. The Court entered judgment
for Doe in this amount. After trial, the doctors moved for
judgment as a matter of law, a new trial on liability and
damages, or remittitur of the jury award. At the post-trial
motion hearing, the Court recognized that the doctors raised
a strong argument for remittitur and urged the parties to
consider settling. Before the Court ruled on the post-trial
motions, the parties settled the claims against the doctors.
In the release accompanying the settlement, Doe agreed to
“cooperate fully in executing and filing all pleadings
necessary to vacate the judgment entered in the Lawsuit and
have the Lawsuit dismissed with prejudice and without
costs.” Dkt. No. 240-1 at 5. He also reserved the right
to pursue claims against Lahey (which was voluntarily
dismissed during trial), including under Mass. Gen. Laws chs.
93A and 176D. Doe subsequently filed a second lawsuit against
Lahey for violation of Chapters 93A and 176D.
On
March 29, 2019, the doctors filed a “joint”
motion to vacate the judgment against them. Doe notified the
Court three days later that he did not assent to the motion.
The doctors filed a second motion to vacate on April 9. In
this motion, they point to Doe's agreement in the release
that he would cooperate in vacating the judgment. Doe
responds that the parties settled with the understanding that
he would pursue a claim under Chapters 93A and 176D against
Lahey for unfair and deceptive insurance settlement
practices. A court would calculate multiple damages for a
willful or knowing violation using the $18.4 million judgment
as the base amount, Doe explains, so he would not agree to
vacate the judgment unless Defendants stipulated to this
amount for this purpose. The doctors refuse to accept this
stipulation (and in any event, their attorneys no longer
represent Leahy).
In
their motion, the doctors do not identify the procedural
basis for their request to vacate the final judgment. They
appear to rely on Federal Rule of Civil Procedure 60(b),
which “grants federal courts the power to vacate
judgments whenever such action is appropriate to accomplish
justice.” Bouret-Echevarría v. Caribbean
Aviation Maint. Corp., 784 F.3d 37, 41 (1st Cir. 2015)
(quotation omitted). Specifically, Rule 60(b)(6) permits a
court to vacate a judgment for “any other reason
[besides those specified in Rule 60(b)(1)-(5)] that justifies
relief.” Vacatur is fundamentally an equitable
doctrine, and a party seeking vacatur must show that the
equities tilt in its favor. See Shelby v. Superformance
Int'l, Inc., 435 F.3d 42, 47 (1st Cir. 2006).
In
U.S. Bancorp Mortgage Co. v. Bonner Mall
Partnership, the Supreme Court held that, in the absence
of “exceptional circumstances, ” an appellate
court should not vacate a lower court judgment under review
if the case becomes moot due to settlement. 513 U.S. 18, 29
(1994); see also Motta v. Dist. Dir. of Immigration &
Naturalization Servs., 61 F.3d 117, 118-19 (1st Cir.
1995) (per curiam) (vacating a lower court judgment on appeal
because the parties settled while the appeal was pending and
exceptional circumstances justified vacatur). Courts are
split on whether Bancorp's presumption against
vacatur and exceptional circumstances test apply to district
court decisions to vacate their own judgments upon
settlement. Compare Marseilles Hydro Power LLC v.
Marseilles Land & Water Co., 481 F.3d 1002, 1003
(7th Cir. 2007) (stating in dicta that Bancorp's
exceptional circumstances test does not apply to district
courts), and Am. Games, Inc. v. Trade Prods., Inc.,
142 F.3d 1164, 1167-70 (9th Cir. 1998) (holding that an
equitable balancing test, not Bancorp's
exceptional circumstances test, applies to district courts),
with Amoco Oil Co. v. U.S. Envtl. Prot. Agency, 231
F.3d 694, 698 (10th Cir. 2000) (assuming Bancorp
applies to district courts), and Tustin v. Motorists Mut.
Ins. Co., 668 F.Supp.2d 755, 762 (N.D. W.Va. 2009)
(same). Because Rule 60(b)(6) also requires a court to
examine whether exceptional circumstances justify the
extraordinary remedy of vacatur, see
Bouret-Echevarría, 784 F.3d at 44, other courts
have held that the Bancorp and Rule 60(b)(6)
standards are identical, see Valero Terrestrial Corp. v.
Paige, 211 F.3d 112, 117 (4th Cir. 2000); Vertex
Surgical, Inc. v. Paradigm Biodevices, Inc., 648
F.Supp.2d 226, 229-30 (D. Mass. 2009).
The
Court need not decide the precise standard for district court
vacatur of a final judgment upon settlement because
exceptional circumstances justify vacatur here. At the post-
trial motion hearing, the Court informed the parties that it
would likely remit the jury verdict and urged the parties to
settle. While a party that voluntarily settles generally
forfeits the right to challenge a judgment, Bancorp,
513 U.S. at 25, the equities favor vacatur when a court
expressly instigates settlement discussions, see
Motta, 61 F.3d at 118 (finding that exceptional
circumstances justified vacatur where the parties settled
“only at the suggestion” of the appellate court).
Most
importantly, declining to vacate the final judgment would
grant Doe a windfall. In the absence of vacatur, if Doe
proves that Leahy willfully or knowingly violated Chapters
93A and 176D, the Court would double or treble the $18.4
million final judgment to calculate damages. See Rhodes
v. AIG Domestic Claims, Inc., 961 N.E.2d 1067, 1078
(Mass. 2012) (holding that a prevailing plaintiff in a
Chapter 93A lawsuit concerning “an event or a
transaction that has given rise to a judgment in favor of the
plaintiff” is entitled to double or treble the amount
of the judgment if he proves a willful or knowing violation).
Because the Court intended to remit the verdict, and told the
parties it was likely to do so, it would be inequitable to
allow Doe to use the $18.4 million figure to calculate
multiple damages. Leahy's inability to challenge the
judgment heightens the inequity. Declining to vacate under
these circumstances would incentivize plaintiffs in Doe's
position to settle strategically post-judgment to avoid
remittitur of an unduly large jury verdict. Doe also agreed
to vacate the judgment as part of the settlement, and both
sides were aware of his intention to file a new lawsuit
against Leahy when they entered into the settlement
agreement. Doe presumably received something of value in the
settlement for his consent to vacatur, and the Court cannot
allow Doe to escape his end of this bargained-for exchange.
ORDER
Accordingly,
Dr. Hreib and Dr. Southard's motion to vacate the
judgment (Docket No. 240) is
ALLOWED. The Court dismisses
Doe's claims ...