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In re Master Key Antitrust Litigation

United States District Court for the District of Connecticut · Civil Procedure

Civil ProcedureRule 60(b)Relief from judgmentSettlement judgmentsRule 60(b)(5)Rule 60(b)(6)change in lawsettlement

Facts

Plaintiffs brought multidistrict antitrust class actions seeking treble damages under § 4 of the Clayton Act, alleging manufacturers conspired to fix and maintain prices of contract hardware. Earlier, the court denied defendants' summary-judgment motions on two grounds: that ultimate consumers were injured within the meaning of § 4, and that there were factual questions whether plaintiffs were effectively direct purchasers, including through cost-plus or similar arrangements. During trial, Eaton and Sargent settled, the court approved the settlements as fair, and final judgments dismissing the actions with prejudice were entered. After Illinois Brick held that indirect purchasers of concrete blocks had no cause of action under § 4 against manufacturers, Eaton and Sargent sought to vacate the settlement judgments under Rule 60(b).

Issue

Whether defendants who voluntarily settled and allowed final judgments to be entered may obtain relief under Rule 60(b)(5) or Rule 60(b)(6) based on the Supreme Court's subsequent decision in Illinois Brick. Also, whether those judgments had prospective application or whether extraordinary circumstances justified reopening them.

Rule

Rule 60(b)(5) does not permit relief merely because the law applied in reaching a judgment has later changed in an unrelated case; a judgment is not 'based on' a prior judgment when the earlier case served only as precedent. The prospective-application clause of Rule 60(b)(5) concerns judgments like injunctive decrees requiring continuing judicial supervision and does not cover consummated money-damages settlements. Rule 60(b)(6) relief is reserved for extraordinary circumstances that prevented normal review, and a party that made a conscious, informed litigation choice to settle rather than appeal cannot later reopen the judgment because hindsight suggests the choice was unwise.

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In a federal antitrust damages suit in Chicago, North Harbor Steel settled with a class of restaurant owners for a fixed payment, and the district court entered final judgment dismissing the claims with prejudice. A year later, the Supreme Court rejected the legal theory that several lower courts had previously used to deny North Harbor Steel's earlier motion to dismiss.

North Harbor Steel moves under Rule 60(b)(5), arguing the final judgment was "based on" the now-rejected lower-court decisions. How should the court rule?

Explanation. Rule 60(b)(5) allows relief when a prior judgment upon which the judgment is based has been reversed or vacated, not when the court merely relied on precedent that was later overruled in another case. A later change in decisional law is not enough. (Derived from In re Master Key Antitrust Litigation (n.d.).)