adidas America, Inc., et al. v. Thom Browne, Inc.

Federal Rule of Civil Procedure 60(b)(3) authorizes a court to relieve a party from a final judgment on account of fraud, misrepresentation, or “misconduct by an opposing party.” Five courts of appeals—the First, Fourth, Fifth, Ninth, and Federal Circuits—have agreed that a party’s negligent, inadvertent, or accidental failure to produce discoverable documents can constitute “misconduct” sufficient to support the grant of a new trial under this rule. By contrast, the Tenth Circuit has adopted a narrow view of discovery “misconduct” that applies only where a party acts with an “intent to deceive.” In this case, the Second Circuit departed from the strong majority consensus. Despite finding that respondent’s failure to produce four smoking-gun emails during discovery was the product of negligence, the Second Circuit deepened the existing circuit split by holding that only actions that are “worse than negligent” can constitute misconduct under Rule 60(b)(3). In so holding, the Second Circuit immunized parties whose negligent failure to meet their discovery obligations does not come to light until after final judgment. This ruling undermines the federal courts’ fundamental commitment to fair adjudication and creates perverse incentives for litigants. The question presented is: Whether “misconduct” within the meaning of Federal Rule of Civil Procedure 60(b)(3) is limited to behavior by an opposing party that is “worse than negligent,” or whether a negligent failure to produce discoverable documents may also constitute “misconduct” sufficient to support relief from a final judgment.