7th Circuit upholds denial of fraud on the court, attorney sanctions

June 20, 2018

The 7th Circuit Court of Appeals has upheld the denial of an Indiana’s man motion alleging fraud on the court and affirmed sanctions against his attorney, finding the district court did not err when making either ruling.

With decades of experience in the safe operation and maintenance of electric-power distribution equipment, Bennie Kennedy taught electrical and industrial safety classes at Prairie State College from 2004 to 2010. However, the school was not aware that Kennedy was not actually qualified to teach because he did not meet any of three possible combinations for education and work experience that Prairie State requires for its faculty.

In addition to his teaching duties, Kennedy held a job with Schneider Electric, which required its employees to obtain advance approval before teaching classes or publishing articles in an effort to protect proprietary information. Kennedy, however, published two articles about power distribution without permission from his employer in 2010.

Upon learning of the articles, a Schneider Electric human resources manager contacted Prairie State with concerns that Kennedy’s course material contained proprietary information. The following fall, the school learned that Kennedy did not meet faculty requirements and, thus, chose not to rehire him.

Kennedy then sued Schneider Electric in Bennie Kennedy and John H. Davis v. Schneider Electric, 17-1645 and 17-1786, alleging defamation and malicious interference with an advantageous relationship because a human resources phone call to Prairie State allegedly cost him his teaching job. The U.S. District Court for the Northern District of Indiana, however, granted summary judgment to Schneider Electric in 2014 after finding the company presented sufficient evidence that Prairie State fired Kennedy solely because he lacked the requisite qualifications.

Kennedy did not appeal that ruling, but instead filed a motion to set aside the judgment for fraud on the court more than a year after the district court’s summary judgment ruling. His motion argued that summary judgment had been granted based on perjured deposition testimony and a perjured affidavit. Specifically, he claimed the HR manager lied about her reason for calling Prairie State and pointed to the fact that Prairie State had undergone a full accrediting review while he was still a faculty member.

The district court denied Kennedy’s motion, and the 7th Circuit Court of Appeals affirmed that ruling on Tuesday.

“As the district court stressed, Kennedy had the opportunity to challenge this same evidence on summary judgment,” Judge David Hamilton wrote. “If the court made a mistake back in 2014, Kennedy could have asked for reconsideration and/or appealed. He did neither.”

The court also affirmed the imposition of sanctions in the amount of $10,627.16 against Kennedy’s attorney, John H. Davis.

“Davis makes no effort to explain how his investigations of the facts and law underlying the Rule 60 motion he filed were reasonable,” Hamilton wrote. “The district court awarded sanctions for having to respond to this motion, and Davis has not advanced a coherent argument that shows how this grant was an abuse of discretion.”

Finally, the court denied Schneider Electric’s request for appellate sanctions, noting the request was not filed in a separate motion.

“And we cannot help but note the irony inherent in a party’s procedurally improper request that the court sanction an opposing party for failing to comply with other procedural rules,” Hamilton wrote. “… While (Federal Rule of Appellate Procedure) 38 authorizes the court to impose sanctions on its own initiative ... the better course here is to signal as clearly as we can that this case should be over and done with.”


Recent Articles by Olivia Covington