Ninth District judge rules no fraud in 2007 forest fire

By Angela Underwood | Aug 7, 2017

SAN FRANCISCO - California Ninth District Court of Appeal Chief Judge Sidney R. Thomas found no alleged fraud in United States of America v. Sierra Pacific Industries.

“The instances of alleged fraud known before settlement cannot justify relief, and the instances discovered after settlement do not rise to the level of fraud,” the judge wrote in his ruling regarding the "Moonlight Fire" that scorched sections of the Lassen and Plumas National Forest in 2007.

The 20-year trial and appellate litigator and certified Florida Bar conflict resolution mediator Nick Shannin told the Northern California Record  that Thomas ruling means the settlement could not be rescinded after new findings of fraud, an attempt made by Sierra Pacific Industries. 

“The court has made clear the finality of the settlement, not to be disturbed. Other issues would come of it if new findings occurred, but rescinding this settlement after Final Judgment will not be one of them,” said Shannin, whose Orlando firm was included as a 2017 U.S. News & World Report best law firm.

As for future rulings similar to Thomas arising, Shannin said “caveat emptor – let the buyer [or settling party] beware.”

"If you enter into a settlement, in federal court, where you voluntarily agree to let the court enter a final judgment and dismiss a case with prejudice and part of your litigation before the settlement involved allegations of potential fraudulent conduct, the Court will not undo the judgment absent wholly new and unforeseeable fraud, and maybe not even then,” Shannin added.

Discussing the decision, the judge wrote in his ruling that “the defendants argued that the government’s alleged misrepresentations throughout the investigation and litigation constituted United States against private forestry operators and individuals to recover damages and also alleged newly discovered fraud after the settlement."

The judge also wrote in his ruling “the panel further held that none of the allegations of after-discovered fraud, either individually or as a whole, established that the government committed fraud on the court within the meaning of Rule 60. recuse himself under Canon 3C of the Code of Conduct for U.S. judges and because of an appearance of bias created by activity on a Twitter account that did not bear the judge’s name, but was allegedly controlled by him.”

When asked his opinion on the alleged fraud in the U.S. Forest Service, Shannin replied without hesitation. “Fraud, bad. Forest fires, bad. Judges on Twitter, bad. This case is not really about any of these evils as much as it is about the importance, particularly in federal court, of preserving the finality of judgments so people, parties, and courts can anticipate reacting to that finality in the future.”

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