Antitrust plaintiff denied 60(b) relief from prior judgment.

Byline: Eric T. Berkman

The 1st U.S. Circuit Court of Appeals has ruled that a tech company asserting it was fraudulently induced into settling a claim it had brought against a company for allegedly anticompetitive behavior was not entitled to Rule 60(b)(6) relief enabling it to bring a new action in light of the alleged fraud.

Plaintiff U-Nest Holdings, a tech startup that makes an app for families to invest in 529 college savings plans, initially brought an action against defendant Ascensus College Savings Recordkeeping Services in Providence Superior Court. The suit alleged anticompetitive behavior designed to drive the plaintiff out of business while paving the way for the defendant to market a similar app. A settlement agreement in that case was incorporated into a federal court judgment the following year.

A year later, when Ascensus marketed its own app, the plaintiff, seeking to proceed with a new federal action, moved for relief from the prior judgment under Rule 60(b)(6) of the Federal Rules of Civil Procedure, which provides for such relief in cases of fraud or misrepresentation by an opposing party.

According to U-Nest, in agreeing to settle the prior federal suit, it relied on in-court statements by Ascensus' counsel in which he denied that the defendant was developing an app or conspiring to drive U-Nest out of business.

A U.S. District Court judge denied the 60(b)(6) motion, citing lack of evidence of fraud or misrepresentation.

The 1st Circuit affirmed, rejecting U-Nest's argument that the District Court abused its discretion.

"U-Nest argues ... that the district court erred by denying its motion solely on the basis that U-Nest had failed to request an evidentiary hearing," Senior Judge Sandra L. Lynch wrote. "The district court denied U-Nest's motion not because it had failed to request an evidentiary hearing, but rather because U-Nest had not adequately substantiated its allegations of fraud."

The seven-page decision is U-Nest Holdings, Inc. v. AscensusCollege Savings Recordkeeping Services, LLC, Lawyers Weekly No. 01-188-23. The full text of the ruling can be found here.

Marc DeSisto of Providence, who represented Ascensus before the 1st Circuit, could not be reached for comment prior to deadline.

Plaintiff's counsel, Joseph A. Farside Jr. of Providence, declined to comment.

Alleged inducement

U-Nest filed its state court suit in 2019 alleging that Ascensus, a 529 plan management company, waged an anticompetitive campaign...