Federal Trade Commission v. Elite IT Partners, Inc.

No. 23-4009. 1/23/2024. D.Utah. Judge Bacharach. Stipulated Judgment—Case Law Change—Vacatur—Fed. R. Civ. P. 60(b)(6).

January 23, 2024

The Federal Trade Commission sued Martinos and Elite IT Partners, Inc. (collectively, defendants), alleging a fraudulent scheme to sell unnecessary services. The parties settled the lawsuit through a stipulated judgment that provided equitable monetary relief under 15 USC § 13(b) and waived future challenges. About a year after entry of the stipulated judgment, the US Supreme Court held in AMG Capital Management, LLC v. FTC, 593 U.S. 67, 75–78 (2021), that § 13(b) doesn’t allow equitable monetary relief. Defendants then requested vacatur of the stipulated judgment under Fed. R. Civ. P. 60(b)(6). The district court denied the motion, reasoning that the case law change in arose in a factually unrelated case and defendants hadn’t presented other circumstances warranting vacatur.

On appeal, defendants argued that the stipulated judgment was invalid. However, the stipulated judgment’s waiver clause prevents defendants from contesting or challenging the validity of the stipulated judgment on appeal. Further, defendants would not have prevailed even if they hadn’t waived their appellate arguments because (1) the district court properly interpreted Tenth Circuit case law regarding relief under Rule 60(b)(6); (2) the change in case law under AMG Capital Management, LLC doesn’t support vacatur because the cases are factually unrelated, and the district court had entered a final judgment before defendants moved for vacatur; and (3) defendants other equitable arguments, which were considered by the district court, all depended on AMG Capital Management, LLC.

The denial of defendants’ Rule 60(b)(6) motion to vacate the stipulated judgment was affirmed.