United States v. Estate of Stonehill

Harry Stonehill and Robert Brooks (“Taxpayers”) appeal the district court’s denial of their Rule 60(b) motion to vacate a 1967 tax judgment against them. Based on evidence discovered through the Freedom of Information Act (“FOIA”), Taxpayers argue that the government committed fraud on the court during their 1967 suppression hearing, United States v. Stonehill, 274 F.Supp. 420 (S.D.Cal.1967) (“Stonehill /”), and their subsequent appeal to this court, Stonehill v. United States, 405 F.2d 738 (9th Cir.1968) (“Stone-hill II ”). We conclude that, although the evidence uncovered by Taxpayers shows some misconduct on the part of the government, it is insufficient to demonstrate fraud on the court. Taxpayers also argue that the judgment should be vacated under United States v. Throckmorton, 98 U.S. 61 , 25 L.Ed. 93 (1878), because William Saunders, Taxpayers’ business associate who sometimes served as their attorney, gave information to the government. Because Taxpayers have not shown Saunders was their attorney rather than their business associate at the time he informed on Taxpayers, we reject Taxpayers’ Throckmorton claim.

As will become apparent during the course of this…