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Kennedy v. Schneider Electric

United States Court of Appeals, Seventh Circuit

June 19, 2018

Bennie Kennedy, Plaintiff-Appellant,
v.
Schneider Electric, formerly known as Square D Company, Defendant-Appellee. and John H. Davis, Respondent-Appellant,

          Argued January 10, 2018

          Appeals from the United States District Court for the Northern District of Indiana, Hammond Division. No. 12-CV-122 - Paul R. Cherry, Magistrate Judge.

          Before Wood, Chief Judge, and Hamilton, Circuit Judge, and Bucklo, District Judge. [*]

          HAMILTON, CIRCUIT JUDGE.

         In 2012, Bennie Kennedy filed a lawsuit against his longtime employer, Schneider Electric. In 2014, the district court granted summary judgment for Schneider Electric. More than a year later, and without offering any new evidence, Kennedy's lawyer filed a motion to set aside the judgment for fraud on the court, accusing Schneider Electric's lawyers of suborning perjury. The district court denied that motion and exercised its discretion to impose sanctions on Kennedy's lawyer under Rule 11. Kennedy appeals the denial of his motion, and his lawyer appeals the sanction order. We affirm both decisions.

         I. Factual Background and Procedural History

         A. The Initial Lawsuit

         Plaintiff Bennie Kennedy has decades of experience in the safe operation and maintenance of electric-power distribution equipment. From 2004 to 2010, he taught classes in electrical and industrial safety at an Illinois community college, Prairie State College. Kennedy did this teaching in addition to his day job with defendant Schneider Electric, whose proprietary power-distribution equipment he knows very well from years of first-hand experience. To protect its proprietary information, Schneider Electric requires its employees to obtain advance approval before they teach classes or submit articles for publication.

         Without obtaining Schneider Electric's permission, in 2010 Kennedy published two articles about power-distribution equipment in trade publications. Kennedy identified himself in these articles as a Prairie State instructor. When Schneider Electric's marketing staff caught wind of these articles in July 2010, a human resources manager contacted Prairie State to ask about the contents of Kennedy's course materials, which she worried might have contained proprietary information.

         That fall, while reviewing the credentials of instructors expected to teach at the college the following spring, Prairie State officials realized that Kennedy did not possess the qualifications required to teach at the college. As Kennedy later admitted, he did not meet any of the three possible combinations of education and experience that would have qualified him to teach electrical safety classes at Prairie State. The following spring, after asking Kennedy for information about his credentials and reviewing his response, Prairie State decided not to rehire Kennedy as an adjunct instructor. Prairie State left open the possibility, though, that Kennedy could be reinstated in the future if he could prove that he had the required qualifications.

         Almost a year later, Kennedy filed this lawsuit against Schneider Electric alleging defamation and malicious interference with an advantageous relationship. His complaint alleged that Schneider Electric's human resources staff had defamed him by calling Prairie State and expressing concern about his course materials. Kennedy further alleged that this telephone call resulted in the loss of his teaching position. Kennedy filed the case in state court, but after his lawyer told Schneider Electric's lawyer that he would "venture to guess" that damages would be over $75, 000, Schneider Electric removed the case to the Northern District of Indiana based on diversity jurisdiction under 28 U.S.C. § 1332.

         Kennedy's lawsuit survived a Rule 12 motion to dismiss on the pleadings, but in 2014 the district court granted Schneider Electric's motion for summary judgment. Magistrate Judge Cherry, presiding with the consent of the parties under 28 U.S.C. § 636(c), found that the evidence showed beyond reasonable dispute that Prairie State "decided to revoke Plaintiff's teaching approval solely because he did not meet [Prairie State's] credentialing requirements" and not because of Schneider Electric's telephone call. Dkt. 49 at 15. The court entered final judgment in favor of Schneider Electric the same day. Kennedy did not appeal.

         B. The Rule 60 Motion and Sanctions

         More than a year after judgment was entered, Kennedy filed a motion to set aside the judgment for fraud on the court. The motion invoked Federal Rule of Civil Procedure 60(d)(3), which does not actually authorize relief but provides that the rest of Rule 60 does not limit a court's inherent power to set aside a judgment for fraud on the court. See Fed.R.Civ.P. 60(d)(3); see also Fed.R.Civ.P. 60(b) & (c)(1). A motion invoking this inherent power is not subject to the one-year limit for motions under Rule 60(b)(3). See In re Golf 255, ...


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