United States District Court, M.D. North Carolina
NEAL E. HALL, Plaintiff,
U.S. COMMODITY FUTURES TRADING COMMISSION, Defendant.
Loretta C. Biggs United States District Judge.
the Court is a Motion to Dismiss Complaint for Failure to
State a Claim Upon Which Relief Can Be Granted, brought by
Defendant U.S. Commodity Futures Trading Commission (the
“Commission”), pursuant to Federal Rule of Civil
Procedure 12(b)(6). (ECF No. 7.) Plaintiff, Neal E. Hall,
initiated this action on March 27, 2017, pursuant to Federal
Rule of Civil Procedure Rule 60(d), seeking relief from a
judgment entered against him in U.S. Commodity Futures
Trading Comm'n v. Hall, 49 F.Supp.3d 444 (M.D. N.C.
2014), aff'd, 632 Fed.Appx. 111 (2015) (per
curiam) (“Prior Action”). (ECF No. 1.) For the
reasons stated below, the motion before the Court will be
Commission initiated the Prior Action against Mr. Hall,
“alleging that Hall improperly acted as a commodity
trading advisor (“CTA”) in violation of the
Commodity Exchange Act (‘CEA'), 7. U.S.C. §
6m(1) (2012), ” and its implementing regulations.
Hall, 632 Fed.Appx. at 112. In the Prior Action, the
district court “adopted the recommendation of the
magistrate judge, granted summary judgment to [the
Commission], and imposed a permanent injunction and a
monetary penalty in the mount of $210, 000.”
Id. The Fourth Circuit affirmed the judgment entered
by this Court in an unpublished, per curiam opinion without
hearing oral argument. Id. at 114.
Hall, in his Complaint, raises several grounds that, he
alleges, entitle him to relief from the judgment entered
against him in the Prior Action. (See generally ECF
No. 1.) Mr. Hall alleges that: the judgment “ought not,
in equity and good conscience . . . be enforced, ”
(id. ¶¶ 84-91); the Prior Action was a
criminal proceeding lacking safeguards guaranteed by the
Fifth and Sixth Amendments, (id. ¶¶
92-103); the judgment violated Mr. Hall's right to
counsel (id. ¶¶ 104-109); the judgment
“was obtained in violation of Hall's privilege
against self-incrimination, ” (id.
¶¶ 110-119); the judgment “was obtained in
violation of Hall's right to trial by jury, ”
(id. ¶¶ 120-123); the judgment was
“procedurally defective” because “[t]he
Magistrate Judge determined the merits of the charges against
Hall, as well as the specifics of the injunction and monetary
punishments without providing Hall notice and an opportunity
to be heard or to present evidence, ” (id.
¶¶ 124-128); the CEA, as applied, violates the
First Amendment, (id. ¶¶ 129-146); the
Commission violated its discovery obligations, (id.
¶¶ 147- 154); “[t]he basis for determining
that Hall was subject to the CEA, i.e., that he was
‘holding out' as a CTA, is unconstitutionally
vague, ” (id. ¶¶ 55-56); the fines
imposed on Mr. Hall were excessive and therefore violated the
Eighth Amendment, (id. ¶¶ 155-160); and,
lastly, “that the Court enter a stay of collection of
the monetary fine pending disposition of this cause on the
merits, ” (id. ¶¶ 161-163).
60(d)(1) confirms “a court's power to entertain an
independent action to relieve a party from a judgment, order,
or proceeding.” Fed.R.Civ.P. 60(d)(1). The Supreme
Court has stated that: “Independent Actions must . . .
be reserved for those cases of ‘injustices which, in
certain instances, are deemed sufficiently gross to demand a
departure' from rigid adherence to the doctrine of res
judicata.” United States v. Beggerly, 524 U.S.
38, 46 (1998) (quoting Hazel-Atlas Glass Co. v.
Hartford-Empire Co., 322 U.S. 238, 244 (1944)).
“[A]n independent action should, ” therefore,
“be available only to prevent a grave miscarriage of
justice.” Id. at 47. This “grave
miscarriage of justice” standard is
“demanding.” Id. Compare Id.
(recognizing as a grave miscarriage of justice a case
“in which the plaintiff alleged that judgment had been
taken against her in the underlying action as a result of a
forged document” (citing Marshall v. Holmes,
141 U.S. 589 (1891))), with Great Coastal Exp., Inc. v.
Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen &
Helpers of Am., 675 F.2d 1349, 1358 (4th Cir. 1982)
(concluding that “perjury and false testimony are not
grounds for relief in an independent action”). The
Fourth Circuit has articulated five elements that a party
must satisfy to bring an independent action under Rule
(1) a judgment which ought not, in equity and good
conscience, to be enforced;
(2) a good defense to the alleged cause of action on which
the judgment is founded; (3) fraud, accident, or mistake
which prevented the defendant in the judgment from obtaining
the benefit of his defense; (4) the absence of fault or
negligence on the part of defendant; and (5) the absence of
any adequate remedy at law.
Id. Failure to satisfy any one of these elements is
fatal to an action brought under Rule 60(d)(1). See
Id. (affirming a denial of Rule 60(b) relief when one
element was not satisfied). With these principles in mind,
the Court will consider Mr. Hall's request for the Court
to entertain this independent action.
most obviously lacking element of Mr. Hall's Rule
60(d)(1) action is the fifth Great Coastal
element, the absence of any adequate remedy at law.
“The requirement that there is no other available or
adequate remedy requires a showing by the aggrieved party
that ‘there was no opportunity to have the ground now
relied upon to set aside the judgment fully litigated in the
original action.'” Hudson v. United
States, No. 3:13-cv-342-FDW, 2018 WL 1413189, at *2
(W.D. N.C. March 21, 2018) (quoting Gleason v.
Jandrucko, 869 F.2d 556, 560 (2d Cir. 1988)). Thus,
“[a] party cannot relitigate ‘in an independent
action issues that were open to litigation in the former
action where he had a fair opportunity to make his claim or
defense in that action.'” Id. (quoting
Sinesterra v. Roy, 347 Fed.Appx. 9, 10 (5th Cir.
2009)). All of the contentions raised by Mr. Hall in support
of his Rule 60(d)(1) challenge are matters that Mr. Hall
either could have, or did, raise in the Prior Action and on
appeal. In his opposition brief, Mr. Hall contends that he
lacks an adequate remedy at law because “[a]t the
present time, Mr. Hall has exhausted his appellate remedies,
and his primary arguments as to Constitutionality, evidence,
and the relinquishment of his First Amendment privilege were
considered to be unreviewable, because Mr. Hall failed to
raise these issues and questions as objections to the
Recommendation of the Magistrate Judge.” (ECF No. 11 at
31.) However, the Court is unpersuaded by this contention
because the Court can discern no “grave miscarriage of
justice” in Mr. Hall's failure to raise potentially
meritorious objections before the district
court. The court, therefore, concludes that the
fifth Great Coastal element, the absence of any
adequate remedy at law, has not been satisfied. Consequently,
Mr. Hall is not entitled to relief under Rule 60(d)(1).
Court will nevertheless examine Mr. Hall's specific
arguments. Having done so, the Court cannot discern that a
grave miscarriage of justice occurred in the Prior Action on
the grounds advanced by Mr. Hall. Many of the alleged grounds
for bringing this Rule 60(d)(1) action are in tension with
Supreme Court precedent. For example, in support of his
contention that the Prior Action “is properly
classified as a criminal case, ” Mr. Hall argues:
“The Recommendation and Judgment impose the affirmative
disabilities or restraints of a lifetime trading ban and
permanent gag order against Mr. Hall.” (ECF No. 11 at
5.) But see Hudson v. United States, 522 U.S. 93,
104 (1997) (concluding that a prohibition from “further
participating in the banking industry” does not involve
“‘affirmative disability or restraint, ' as
that term is normally understood”). Mr. Hall also
asserts: “The monetary penalty, or fine, is
traditionally regarded as punishment.” (ECF No. 11 at
5.) But see Hudson, 522 U.S. at 105 (“First,
neither money penalties nor debarment has historically been
viewed as punishment.”). Mr. Hall further argues:
“The sanctions imposed - penalty or fine, gag order,
lifetime trading ban - serve no civil or remedial purpose,
but instead serve only the purpose of punishment and
deterrence.” (ECF No. 11 at 5.) But see
Hudson, 522 U.S. at 104 (recognizing that a prohibition
on future participation in the banking industry, “while
intended to deter future wrongdoing, also serve to promote
the stability of the banking industry”). Mr. Hall
offers no legal support for these or any other of his
arguments in his opposition brief that the Prior Action
should be classified as a criminal case.
other grounds advanced in the Complaint for Mr. Hall's
Rule 60(d)(1) action appear in tension with Supreme Court
precedent. Mr. Hall alleges that the judgment entered in the
Prior Action, a civil case, violated his right to counsel.
(ECF No. 1 ¶¶ 104-109.) But see
Lassiter v. Dep't of Soc. Servs. of Durham Cty., 452
U.S. 18, 26-27 (1981) (stating “the presumption that an
indigent litigant has a right to appointed counsel only when,
if he loses, he may be deprived of his physical
liberty”). Mr. Hall also states that the judgment in
the Prior Action “was obtained in violation of [his]
right to trial by jury.” (Id. ¶¶
120-123.) But see Parklane Hosiery Co., Inc. v.
Shore, 439 U.S. 322, 336 (1979) (citing Fidelity
& Deposit Co. v. United States, 187 U.S. 315, 319-21
(1902), for the proposition that “summary judgment does
not violate the Seventh Amendment”). While these and
other grounds asserted in the Complaint may have possibly
been colorable, or even persuasive, had they been raised in
the Prior Action, these contentions cannot support the
conclusion that a grave miscarriage of justice has occurred.
See Aldana v. Del Monte Fresh Produce, N.A. Inc.,
741 F.3d 1349, 1359 (11th Cir. 2014) (concluding that
“[p]laintiffs cannot come close to establishing the
requisite elements of an independent action, ” on the
basis of issues not raised in the underlying litigation).
Accordingly, the Court will grant the motion to dismiss Mr.
THEREFORE ORDERED that the Motion of Commodity Futures
Trading Commission to Dismiss Complaint for Failure to State
a Claim Upon Which Relief Can Be Granted, (ECF No. 7), is