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with the advice of counsel, decided to settle their cases, they
knowingly assumed the risk that the ultimate outcome of the
nonsettling test cases on appeal would be more favorable than the
current settlement offer they were about to accept.
Petitioners have cited seven Courts of Appeals opinions as
“Precedent for the remedy of vacating a prior decision on the
grounds cited.” All those cases note that fraud on the court may
form a basis for vacating decisions of the Tax Court, or of a
U.S. District Court. The proposition is unassailable. None of
the cited cases, however, supports the proposition that a party
to a case who knows, or has reason to know, of circumstances in
the case that may be deemed to give rise to fraud on the court,
and who nevertheless agrees to a stipulated decision in that
case, may later obtain relief from that decision on the ground of
fraud. These authorities do not help petitioners.30
Petitioners, after respondent’s objection to their motions
for leave and motions to vacate, filed a reply to that objection.
In their reply, petitioners ask for a hearing on their motions,
noting that, in a pleading filed in 1992, respondent had conceded
that, in a hearing on the misconduct of the Government’s
30Of the seven cases cited, only one supports a sanction of
any sort, on the basis of fraud. See Aoude v. Mobile Oil Corp.,
892 F.2d 1115 (1st Cir. 1989) (case dismissed in view of
plaintiff’s use of fraudulent documents and testimony). This
suggests that the relief petitioners seek is even more
extraordinary than they would be willing to acknowledge.
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