Federal Trade Commission v. Hewitt

Rule 60(b)(4) applies “only in the instance where a judgment is premised either [1] on a certain type of jurisdictional error or [2] on a violation of due process that deprives a party of notice of the opportunity to be heard.” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 271 (2010). “[I]t is hardly extraordinary” if a decision rests on a “then-prevailing interpretation” of the law and the Supreme Court later “arrive[s] at a different interpretation”—and such a change “is all the less extraordinary” where a party has displayed a “lack of diligence” in the original proceedings. Gonzalez v. Crosby, 545 U.S. 524, 536-37 (2005).

Hewitt was ordered to pay a half-billion dollars to the Federal Trade Commission (FTC) after he defrauded people of hundreds of millions of dollars. He appealed the denial of his Fed. R. Civ. P. 60(b) motion for relief from an equitable money judgment. He assigned error to the district court’s determination that the equitable monetary part of the judgment was not “void” under Rule 60(b)(4) in light of a later Supreme Court holding that “equitable monetary relief” was not authorized under the Federal Trade Commission Act 13(b). He also argued it was an abuse of discretion to deny his relief for “extraordinary circumstances” under Rule 60(b)(6). Rule 60(b)(4) applies “only in the instance where a judgment is premised either [1] on a certain type of jurisdictional error or [2] on a violation of due process that deprives a party of notice of the opportunity to be heard.” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 271 (2010). “[I]t is hardly extraordinary” if a decision rests on a “then-prevailing interpretation” of the law and the Supreme Court later “arrive[s] at a different interpretation”—and such a change “is all the less extraordinary” where a party has displayed a “lack of diligence” in the original proceedings. Gonzalez v. Crosby, 545 U.S. 524, 536-37 (2005). The Court found that Hewitt had failed to establish the necessary type of jurisdictional error because his challenge was based on a remedial error. Hewitt also failed to establish a violation of due process because he did not show he was deprived of notice or an opportunity to be heard. The Court concluded the district court did not abuse its discretion by finding there were no extraordinary circumstances to justify relief because of Hewitt never challenged the judgment when it was issued. AFFIRMED.