## Facts

- An underwriting firm entered an underwriting arrangement with a corporation and received 12,500 shares of its stock.
- The underwriting firm later became insolvent, and a receiver was appointed to marshal assets, including the shares, which had substantially declined in value.
- The receiver sued the corporation in federal court, alleging regulatory noncompliance in connection with the underwriting that caused the stock’s loss in value.
- During preparation of that suit, the receiver’s attorney found a written release between the underwriting firm and the corporation that purported to release the corporation from liability for the stock losses.
- The receiver’s attorney did not disclose the release to the defendant corporation or the court, and the receiver obtained a judgment against the corporation.
- The corporation lacked sufficient assets to satisfy the judgment, and the receiver later pursued claims against corporate directors to satisfy it.
- A director learned of the release during the later director litigation and moved to vacate the earlier corporate judgment, alleging it was procured by fraud due to concealment of the release.

## Issues

1. Whether a motion to vacate a judgment based on concealment of a material document is time-barred under Federal Rule of Civil Procedure 60(b)(3).
2. Whether the attorney’s nondisclosure of a release constitutes “fraud on the court” permitting relief from judgment beyond the one-year limit.

## Decision

- The court affirmed denial of the motion to vacate the prior judgment.
- The asserted wrongdoing, even if improper, fell within ordinary fraud or misconduct addressed by Rule 60(b)(3) and was subject to the one-year limitation.
- The nondisclosure did not constitute “fraud on the court,” which is reserved for extreme conduct that corrupts the judicial process itself.

## Legal Principles

- Rule 60(b)(3) permits relief for “fraud,” “misrepresentation,” or “misconduct” by an adverse party, but the motion must be filed within one year of judgment.
- “Fraud on the court” is a narrow doctrine aimed at conduct that subverts the integrity of the adjudicative process itself (e.g., bribery of a judge or juror, or a deliberate scheme by an officer of the court to corrupt the process) and is not governed by the one-year bar.
- An attorney’s failure to disclose a materially adverse document may be serious misconduct, but it does not automatically amount to “fraud on the court” absent a scheme that corrupts the court’s function.
- Finality of judgments weighs strongly against reopening long-settled cases based on adversary nondisclosure that could have been addressed through timely Rule 60(b)(3) relief.

## Conclusion

The Second Circuit held that the delayed challenge to the prior judgment was untimely under Rule 60(b)(3) and that concealment of the release, while improper, did not meet the stringent standard for “fraud on the court,” so the judgment remained in effect.


Kupferman v. Consolidated Rsch. & Mfg. Co., 459 F.2d 1072 (2d Cir. 1972)