The chutzpah to assert "unclean hands"

The federal rules of civil procedure allow you to get post-judgment relief upon a showing of good cause. This means that if judgment is entered on February 1, you can ask the trial court for some relief on June 1 if something happens over the four months which requires the judge to revisit the case, i.e., evidence of fraud or even the discovery of new evidence which could have affected the trial. But there are limits. Lord knows there are limits.


The case is Motorola Credit v. Uzan, decided on March 30. This case involved a lawsuit that Motorola won against Uzan, a Turkish telecommunications firm. Including punitive damages, Motorola was awarded approximately $3 billion in damages. That's right, $3 billion dollars. Then Uzan discovered that Motorola received a set-off in damages from sources (including an insurance company) which arguably allowed Uzan to pay a reduced amount to Motorola. In light of this evidence, under Federal Rule 60(b), Uzan moved the district court for an order reducing its payments to Motorola, probably on the basis that you cannot recover twice for the same injuries.


Rule 60(b) is an equitable remedy, which means that the judge has discretion to alter the judgment. As the Court of Appeals notes, this kind of equitable relief depends, in part, on whether the moving party has clean hands, a legal term of art. The Supreme Court has held that “he who comes into equity must come with clean hands.” Precision Instrument Mfg. Co. v. Automotive Maintenance Mach. Co., 324 U.S. 806, 814 (1945). So, if you want relief from the Court in the interests of fairness, your own behavior must be squeaky clean.


Uzan is not squeaky-clean. This is where the Court of Appeals throws the book at Uzan. As Judge Cabranes notes, "there are already ten published decisions in this Circuit chronicling the background of this case and 'the extraordinary nature of the Uzans’ wrongful behavior.'” Moreover, "Relying on their vast personal wealth, the Uzans have time and again deployed their lawyers to raise legal roadblocks to the enforcement of the judgment against them. They have persistently endeavored to evade the lawful jurisdiction of the District Court and undermine its careful and determined work."


Then the Court of Appeals has a little fun with the case. It does go through the motions of affirming the district court's refusal to grant Uzan Rule 60 relief, stating, "We therefore conclude that the Uzans’ utter disregard for the District Court’s orders precludes the relief that they are seeking, and the District Court did not err in denying it." But the Court only does this after observing that "Despite their flat-out refusal to comply with the District Court’s lawful orders, the Uzans now have the chutzpah to seek post-judgment, equitable relief from complying with those orders."


Chutzpah! We've all heard people use the word Chutzpah. But what does the word really mean? The Second Circuit tells us in a footnote. A gratuitous footnote, but a good one, probably written after the Court of Appeals asked its clerks for some good research on "chutzpah":

"'Chutzpah' as a legal term of art is analytically similar to 'unclean hands,' though not necessarily coterminous with that concept as understood in the law of chancery. The 'classic definition' of chutzpah has been described as 'that quality enshrined in a man who, having killed his mother and father, throws himself on the mercy of the court because he is an orphan.' Leo Rosten, The Joys of Yiddish 92 (1968); see also Thaler v. Second New Haven Bank, Civ. No. B-713, slip op. at 1 (D. Conn. Apr. 10, 1974) (“When the apocryphal child murdered his parents and then sought mercy as an orphan, he set a standard for courtroom chutzpah that has not been rivaled until the filing of this lawsuit”); Scher v. Nat’l Assoc. of Sec. Dealers, 386 F. Supp. 2d 402, 404 (S.D.N.Y. 2005) (quoting the unpublished opinion by then-District Judge Newman and explaining the extraordinary circumstances of the civil suit brought by Seymour Thaler, a convicted felon and former New York state senator). Cf. Yates v. City of New York, 2006 U.S. Dist. LEXIS 54199, at *1 (S.D.N.Y. Aug. 4, 2006) (using this “vastly overused” but nonetheless “most appropriate” term to describe “an individual, [who] after being mauled by the 450-pound Siberian tiger he had been raising inside his fifth-floor apartment along with an alligator, sue[d] the city and the police who entered the apartment in an effort to rescue the animals for doing so without a search warrant”).