U.S. v. Potamkin Cadillac Corp.

• Decision Date: 07 January 1983
• Docket Number: D,No. 463,463
• Citation: 697 F.2d 491
• Parties: 1982-83 Trade Cases 65,138 UNITED STATES of America, Plaintiff-Appellee, v. POTAMKIN CADILLAC CORPORATION, Defendant-Appellant. ocket 82-6155.
• Court: U.S. Court of Appeals — Second Circuit

Page 491

697 F.2d 491

1982-83 Trade Cases 65,138

UNITED STATES of America, Plaintiff-Appellee, v. POTAMKIN CADILLAC CORPORATION, Defendant-Appellant.

No. 463, Docket 82-6155.

United States Court of Appeals, Second Circuit.

Argued Jan. 5, 1983.

Decided Jan. 7, 1983.

Philip I. Beane, New York City, for defendant-appellant.

Jonathan A. Lindsey, Asst. U.S. Atty., New York City (John S. Martin, Jr., U.S. Atty., S.D.N.Y., Thomas D. Warren, Asst. U.S. Atty., New York City, on brief), for plaintiff-appellee.

Before KEARSE, WINTER and PRATT, Circuit Judges.

KEARSE, Circuit Judge:

Defendant Potamkin Cadillac Corporation ("Potamkin") appeals from an order of the United States District Court for the Southern District of New York, Kevin Thomas Duffy, Judge, denying Potamkin's motion pursuant to Fed.R.Civ.P. 60(b)(2) to vacate the court's judgment of February 24, 1982, against Potamkin on grounds of newly discovered evidence. Finding no merit whatever in the appeal, we affirm, and, pursuant to 28 U.S.C. Sec. 1912 (1976) and 28 U.S.C. Sec. 1927 (Supp. V 1981), we award double costs and attorneys' fees to appellee United States, to be paid by Potamkin's attorney, Philip I. Beane, personally.

A. Background

The present action was brought on September 3, 1980, by the United States to compel Potamkin to file a report with the Federal Trade Commission ("Commission") as required by a special order of the Commission pursuant to Sec. 6(b) of the Federal Trade Commission Act, 15 U.S.C. Sec. 46(b) (1976), and to assess against Potamkin a statutory penalty, pursuant to 15 U.S.C. Sec. 50 (1976), of $100 for each day of its failure to file the required report after April 12, 1980. ¹ On May 8, 1981, Potamkin sent a partial report to government counsel which was treated as an acceptable filing. Thereafter the government moved for summary judgment seeking, inter alia, to recover the $100 penalty for each of the 391 days from April 12, 1980 to May 8, 1981. The government's motion was granted, and final judgment in the government's favor for $39,100 was entered on February 24, 1982. As discussed in Part C below, the judgment was affirmed on appeal. United States v. Potamkin Cadillac Corp., 689 F.2d 379 (2d Cir.1982) ("Potamkin I ").

While the direct appeal was pending, Potamkin moved in the district court for an order pursuant to Rule 60(b)(2) vacating the judgment on the ground of "newly discovered" evidence. Potamkin submitted an affidavit asserting that in fact Potamkin had filed the required report with the Commission in September 1980, and that no penalty should have been levied against it for failure to file after that time. ² The affidavit of Marvin Schell, Potamkin's controller until the end of 1980, stated that within two weeks after September 9, 1980, the date on which Potamkin was served in the present action, Schell had sent the Commission, by certified mail, with return receipt requested a report in compliance with the Commission's order. Potamkin also proffered two affirmations by Beane, its attorney. The first Beane affirmation, dated April 26, 1982 ("First Beane Aff."), stated that it was only recently that Beane had been able to locate Schell. It, also stated, as if to bolster Schell's statements, that in the fall of 1980 Schell had informed Beane that a report had been filed in September 1980 and had provided Beane with a copy:

I can state as my own knowledge that I was informed by MR. SCHELL at the time that this proceeding was served upon the defendant that the report would be filed shortly thereafter, and that it was filed shortly thereafter, and that the copy of the report that I had supplied to the U.S. Attorney was a copy given to me by MR. SCHELL within two (2) weeks of that date, ....

(First Beane Aff. p 15.) The second Beane affirmation, dated May 20, 1981 [sic ] ³ ("Second Beane Aff."), reiterated that Beane had been informed in September 1980 that Schell had filed a report in September 1980: "The [September 1980] report, I was told, was filed by MR. SCHELL with the Federal Trade Commission, and I did know this all along." (Second Beane Aff. p 5.)

The government stated that the FTC had no record of ever having received the alleged September 1980 report. Potamkin produced neither a return receipt nor a copy of the report.

The district court denied Potamkin's motion to vacate the judgment.

B. The Merits of the Rule 60(b) Motion

The merits of the present appeal need little discussion. The standard for appellate review of denial of a Rule 60(b) motion, nowhere recognized in Potamkin's brief on appeal, is whether or not the district court abused its discretion. E.g., Audiovisual Publishers, Inc. v. Cenco, Inc., 580 F.2d 50, 52 (2d Cir.1978). We find no such abuse.

In order to succeed on a motion pursuant to Rule 60(b)(2), the movant must present evidence that is "truly newly discovered or ... could not have been found by due diligence." Westerly Electronics Corp. v. Walter Kidde & Co., 367 F.2d 269, 270 (2d Cir.1966). The evidence offered by Potamkin as to the alleged September 1980 filing fails to meet either test. The first Beane affirmation stated that Schell had informed Beane contemporaneously of the September 1980 filing. The second Beane affirmation confirmed that Beane had known "all along" of this filing. Schell was employed by Potamkin for several months after September 1980 and since he supposedly had provided Beane with both information as to the filing and a copy of the report, it would be the height of whimsy to characterize Schell's present statements as "truly newly discovered" evidence.

Further, Schell's affidavit is silent as to why his statement was not available earlier, and Beane's affirmations offer only faint, and hardly credible, enlightenment. No explanation whatever was offered as to why Schell's evidence was not memorialized prior to his departure from Potamkin. And Beane's only explanation as to why he was not able to reach Schell between the end of 1980 and April 1982 was, "[t]he telephone number that I had was a wrong number, which was never answered." (First Beane Aff. p 6.) Beane stated that he could not locate Schell "by any other means," (id.), but did not specify what other means, if any, were attempted.

Given the feebleness of Beane's proffer of "due diligence," and Beane's acknowledgement that he had known of the alleged September 1980 filing all along, it was well within the district court's discretion to reject the explanations and to consider the "evidence" not newly discovered.

C. Costs of this Appeal

We regard Potamkin's appeal from the denial of its Rule 60(b) motion as entirely frivolous--a quality plainly shared by the motion itself--and we are constrained to note that it follows close on the heels of Potamkin's direct appeal from the final judgment, which we also found to be "utterly without legal merit," and "frivolous within the meaning of Rule 38, Fed.R.App.P." Potamkin I, at 380. Having found in Potamkin I that Potamkin's assertions in opposition to the government's summary judgment motion were so lacking in substance and substantiation that it must have been obvious to Beane that they were inadequate to defeat summary judgment, id. at 381, we concluded as...