Vertex Surgical, Inc. v. Paradigm Biodevices, Inc., Civil Action No. 07-10134-DPW.

• Decision Date: 31 August 2009
• Docket Number: Civil Action No. 07-10134-DPW.,First Circuit No. 09-1934.
• Citation: 648 F.Supp.2d 226
• Parties: VERTEX SURGICAL, INC., Plaintiff/Appellant, v. PARADIGM BIODEVICES, INC., Defendant/Appellee.
• Court: U.S. District Court — District of Massachusetts

648 F.Supp.2d 226

VERTEX SURGICAL, INC., Plaintiff/Appellant, v. PARADIGM BIODEVICES, INC., Defendant/Appellee.

Civil Action No. 07-10134-DPW.

First Circuit No. 09-1934.

United States District Court, D. Massachusetts.

August 31, 2009.

COPYRIGHT MATERIAL OMITTED

Thomas E. Kenney, Robert R. Pierce, Pierce & Mandell, PC, Boston, MA, for Defendant/Appellee.

Barbara H. Kramer, Kramer & Kramer, LLP, Ann Arbor, MI, Mitchell A. Kramer, Kramer & Kramer LLP, Rydal, PA, L. Seth Stadfeld, Weston Patrick Willard & Redding, PA, Boston, MA, for Plaintiff/Appellant.

MEMORANDUM AND ORDER

DOUGLAS P. WOODLOCK, District Judge.

The parties, after vigorously litigating this matter to final judgment through summary judgment practice and a jury trial, report that they can settle the case, but apparently find this Court's prior determination of one claim inconvenient to their agreement. Shortly before the deadline for filing a notice of appeal, they jointly moved pursuant to Fed.R.Civ.P. 60(b) "for an order vacating the portion of the court's January 9, 2009 Memorandum and Order, 648 F.Supp.2d 184 (D.Mass.2009) dismissing Plaintiff's claims against Defendants pursuant to the Georgia Wholesale Distribution Act, specifically Part III.B of the Memorandum and Order."

The parties report they "have agreed that, if the Court grants the instant motion, Plaintiffs will not file [or now further pursue]¹ an appeal in this matter, and each party will bear its own costs relating to the trial." The parties' submission neglects directly to address their request for relief in light of U.S. Bancorp Mortgage Co. v. Bonner Mall P'ship, 513 U.S. 18, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994), where the Supreme Court held, in the context of orders for vacatur sought in appellate courts, that only "exceptional circumstances may conceivably counsel in favor of such a course." Id. at 29, 115 S.Ct. 386. The Court further emphasized that "exceptional circumstances do not include the mere fact that the settlement agreement provides for vacatur." Id. I find nothing exceptional in the parties' settlement that would justify vacating a portion of the prior judgment I have entered and consequently will deny the joint motion.

I.

Bonner Mall sought to resolve the tension which exists when litigants seek and receive a formal public act—a judicial decision —and then agree that the court's act is unnecessary to compose the private disputes between them. While Bonner Mall was pending in the Supreme Court, Professor Resnik, in a characteristically thoughtful and provocative essay, explored the questions that Bonner Mall and similar vacatur cases raise:

What value should be accorded adjudication? What limits, if any, should there be on courts' encouragement and facilitation of settlement? Who owns lawsuits, the risks they entail and the decisions generated in their wake? What do the words "public" and "private" mean in the context of court decisions? How should one balance litigants' autonomy and third party interests in litigation?

Judith Resnik, Whose Judgment? Vacating Judgments, Preferences for Settlement, and the Role of Adjudication at the Close of the Twentieth Century, 41 U.C.L.A. L.REV. 1471, 1472 (1994).

Bonner Mall offered an answer to certain of these questions by creating a default rule against vacatur as a result simply of settlement. With a settlement, the Court observed, "the losing party has voluntarily forfeited his legal remedy by the ordinary processes of appeal or certiorari, thereby surrendering his claim to the equitable remedy of vacatur." 513 U.S. at 25, 115 S.Ct. 386.

In crafting this default rule, the Supreme Court was not oblivious to the prospect that "facilitation of settlement" might have "resulting economies for the federal courts." Id. at 27, 115 S.Ct. 386. The Court observed that

while the availability for vacatur may facilitate settlement after the judgment under review has been rendered and certiorari granted (or appeal filed), it may deter settlement at an earlier state. Some litigants, at least, may think it worthwhile to roll the dice rather than settle in the district courts, or in the court of appeals, if, but only if, an unfavorable outcome can be washed away by a settlement-related vacatur. And the judicial economies achieved by settlement at the district-court level are ordinarily much more extensive than those achieved by settlement on appeal.

Id. at 27-28, 115 S.Ct. 386 (emphasis in original).

Ultimately, however, the Court declined to weigh this policy argument in the balance. "We find it quite impossible to assess the effect of our holding, either way, upon the frequency or systemic value of settlement." Id. at 28, 115 S.Ct. 386.

Although Bonner Mall concerned vacatur at the appellate level, the Supreme Court was careful to adopt a familiar standard: that of "exceptional circumstances" (sometimes phrased as "extraordinary circumstances"), id. at 29, 115 S.Ct. 386, the standard that governs Fed.R.Civ.P. 60(b)(6). See, e.g., Gonzalez v. Crosby, 545 U.S. 524, 535, 125 S.Ct. 2641, 162 L.Ed.2d 480 (2005) (noting the "extraordinary circumstances" required to justify reopening a final judgment under Fed.R.Civ.P. 60(b)(6)); United States v. 6 Fox Street, 480 F.3d 38, 45-46 (1st Cir.2007) (describing the "exceptional circumstances" or "extraordinary circumstances" necessary to invoke Fed.R.Civ.P. 60(b)(6)); Ahmed v Rosenblatt, 118 F.3d 886, 891 (1st Cir. 1997) ("exceptional circumstances justifying extraordinary relief" required). In this connection, the Court suggested that

even in the absence of, or before considering the existence of, extraordinary circumstances, a court of appeals presented with a request for vacatur of a district-court judgment may remand the case with instructions that the district court consider the request, which it may do pursuant to Federal Rule of Civil Procedure 60(b).

Bonner Mall, 513 U.S. at 29, 115 S.Ct. 386. This suggestion that recourse be made to Fed.R.Civ.P. 60(b) effectively establishes the standard for consideration by a district court as whether a request for vacatur arises as a result of exceptional or extraordinary circumstances.

II.

The motion for vacatur relief the parties seek here must be understood in the context of the travel of the case to final judgment. The plaintiff Vertex Surgical, Inc., a Georgia corporation which sells medical equipment as a sales representative, brought this action on January 25, 2007 seeking lost commissions following termination of the Independent Agent Agreement it entered into with the defendant Paradigm Biodevices, Inc., a Massachusetts manufacturer and distributor of surgical products. The Agreement provided that "Massachusetts law exclusively shall govern all terms" and that "all disputes in any way relating" to the Agreement "must be litigated in courts sitting in Massachusetts." The plaintiff's complaint alleged three counts: breach of contract (Count I); violation of the Georgia Wholesale Distribution Act (Count II); and violation of the Massachusetts Consumer and Business Protection Act, Mass. Gen. Laws ch. 93A (Count III).

Following substantial completion of discovery, the plaintiff moved for partial summary judgment as to the breach of contract claim and the Georgia Wholesale Distribution Act claim. In a Memorandum and Order dated January 9, 2009, I denied summary judgment to the plaintiff, (a) finding genuine issues of material fact as to Count I, the breach of contract count, Vertex Surgical, Inc. v. Paradigm Biodevices, Inc., 648 F.Supp.2d 184, at 186-90 (D.Mass.2009), and (b) concluding specifically that the parties' contractual choice of law provision barred Count II's invocation of the Georgia Wholesale Distribution Act. Consequently, I granted summary judgment on Count II to the defendant. Id. at 189-92.

Count I was tried to a jury in May and the jury, finding no actionable breach, returned a verdict in favor of the defendant. Meanwhile, I found as factfinder no violation of the Chapter 93A claim asserted in Count III.

On the basis of the jury's factfinding as to Count I, my grant of summary judgment on Count II and my factfinding as to Count III, judgment was entered for the defendant on May 29, 2009. The parties filed the joint Rule 60(b) motion on June 15, 2009; eleven days later the plaintiff filed its Notice of Appeal vesting jurisdiction of the case in the Court of Appeals.

I was advised on August 14, 2009 in an email from the First Circuit's Settlement Counsel that he learned during the course of mediating the case that "[t]he parties have settled all of their claims and have also agreed that if you vacate your ruling insofar as the claim based on the Georgia Act is concerned, their claims will be voluntarily dismissed by Vertex." He further advised that "[u]nless you are inclined to allow the joint motion, I am informed that the appeal will go forward."

III.

The parties offer no argument on the merits why my choice of law ruling on the Georgia Wholesale Distribution Act is in error. Rather, they elliptically advance contentions that (A) the substance of the ruling is so insignificant that it may be discarded without cost and (B) that the practice of vacatur upon settlement is adequate grounds for such a disposition.

(A)

The principal substantive contention in support of the motion to vacate is that "[b]ecause the application of Massachusetts' choice-of-law analysis has been and continues to be developed by Massachusetts state courts, the grant of Rule 60(b) relief will not deprive the public of judicial precedent." This purported concern with the precedential effect of a federal district court decision regarding a state law matter requires some analytical unbundling.²

The judgments of nisi prius courts generally are not precedential as that term is conventionally understood. Such decisions are binding only on the parties under principles of res judicata and even the nisi prius judge who authored them is not...