Post-judgment relief
BLOM Bank SAL v. Michal Honickman
Date: Oct. 4, 2024
Issue: Whether the Federal Rule of Civil Procedure 60(b)(6) applies to a post-judgment request to vacate to file an amended complaint.
Case Summary: The U.S. Supreme Court agreed to examine a Hamas banking lawsuit to determine whether the stringent standard of Rule 60(b)(6) of the Federal Rule of Civil Procedure applies to a post-judgment request to vacate to file an amended complaint.
In 2019, victims and families of victims of terrorist attacks from December 2001 to August 2003 sued BLOM Bank SAL, alleging it aided and abetted the attacks by providing financial services to three customers allegedly associated with Hamas. BLOM Bank argued respondents failed to plausibly allege it was aware of a link between the three customers and Hamas at the time the bank provided the services. The district court invited respondents to amend their complaint on multiple occasions, but respondents chose to proceed with the complaint as plead. The district court dismissed the complaint with prejudice, and on appeal, the Second Circuit affirmed. At no time during the appellate proceeding did respondents seek leave to amend.
Eighteen months after the Second Circuit affirmed, respondents filed a Rule 60(b)(6) motion to vacate the judgment in an attempt to amend its complaint. Rule 60(b)(6) provides “the court may relieve a party or its legal representative from a final judgment, order, or proceeding for … any other reason that justifies relief.” The district court denied the motion, as Rule 60 (b)(6) requires extraordinary circumstances to reopen a final judgment. However, the Second Circuit reversed, ruling district courts are “required to consider Rule 60(b) finality and Rule 15(a) liberality in tandem” when plaintiffs seek to reopen a judgment to file an amended complaint. BLOM Bank petitioned the U.S. Supreme Court for review.
In its petition, BLOM Bank made three main arguments. First, BLOM Bank argued the Second Circuit’s rule conflicts with the decisions of eleven other circuits. According to BLOM Bank, the U.S. Supreme Court has long recognized the compelling interest in protecting the finality of judgments under the Federal Rules of Civil Procedure. Consistent with those principles, BLOM argued Rule 60(b)(6) presents unsuccessful litigants with only “narrow grounds for obtaining post-judgment relief. However, in the Second Circuit’s view, the “liberal spirit of Rule 15(a) generally entitles litigants whose complaints have been dismissed with prejudice a chance to vacate the dismissal under Rule 60(b)(6) to amend — even after the judgment has been affirmed on appeal. BLOM Bank noted this view places the Second Circuit alone as the First, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, and D.C. Circuits have taken the opposite approach. BLOM Bank claimed the circuit split here could not be clearer and the Second Circuit’s decision cannot be reconciled with this “wall of contrary precedents” from other circuits.
Second, BLOM Bank argued the Second Circuit’s rule conflicts with the U.S. Supreme Court’s precedents. In 1897, the U.S. Supreme Court held in Southern Pacific Railroad Company v. United States that if court judgments were not considered final parties would have no reason to seek judicial tribunals to protect their rights to property and person. BLOM Bank stressed that the respect for finality applies with particular force when evaluating motions for relief from judgments under Rule 60. In Kemp v. United States, the Supreme Court noted that, because Rule 60(b)(6) is a catchall for relief on bases other than those in Rule 60(b)(1)-(5), “extraordinary circumstances must justify reopening.” Furthermore, BLOM Bank claimed the Court has left no room for Rule 15’s liberal amendment policy to creep into the equation.
Third, BLOM Bank argued the question presented is exceptionally important, and this case is a clean vehicle for resolving it. According to BLOM Bank, the question presented is critical to the principles of fairness, efficiency, and finality that animate the Federal Rules of Civil Procedure. Further, BLOM Bank claimed the Second Circuit’s standard eschews finality and undermines confidence in the outcome of litigation. BLOM Bank contended it is essential for the Court to clarify the legal framework governing a Rule 60(b)(6) motion seeking to reboot a case with post-judgment (and post-appeal) amendment to the case.
Bottom Line: BLOM Bank’s merits brief is due Dec. 9, 2024.
Documents: Petition
