Hazel-Atlas Co. v. Hartford Co – Case Brief Summary (U.S. Supreme Court)

Hazel-Atlas Co. v. Hartford Co. (1944) 322 U.S. 238, did authorize a federal district court to set aside a judgment obtained by a fraud perpetrated on the court, the case is inapposite for several reasons.

In Hazel-Atlas, the court balanced equitable principles against a "court-made rule ... that judgments should not be disturbed after the term of their entry has expired." (Hazel-Atlas, supra, 322 U.S. at p. 248.)

The Supreme Court merely exercised its supervisory powers to overturn a court-created rule of procedure.

Nothing in Hazel-Atlas authorized a court to exercise equitable principles to disregard a statute expressly designed to limit a court's equitable powers to grant relief from judgment.

The federal high court noted that the fraud was not just against the defendant company, but against the Third Circuit itself. (Hazel-Atlas Co. v. Hartford Co., supra, 322 U.S. at p. 245 "we find a deliberately planned and carefully executed scheme to defraud not only the Patent Office but the Circuit Court of Appeals".)

And it elaborated on the theme that interests were at stake that transcended those of the defrauded defendant.

"Furthermore, tampering with the administration of justice in the manner indisputably shown here involves far more than an injury to a single litigant. It is a wrong against the institutions set up to protect and safeguard the public, institutions in which fraud cannot complacently be tolerated consistently with the good order of society. Surely it cannot be that preservation of the integrity of the judicial process must always wait upon the diligence of litigants. The public welfare demands that the agencies of public justice be not so impotent that they must always be mute and helpless victims of deception and fraud." (Id. at p. 246.)

Hazel-Atlas does stand for the idea that the need to protect the integrity of the judicial process itself is of paramount value absent a statute directly contrary.Thus Hazel-Atlas should not read as upholding a general inherent judicial power to set aside judgments, even though procured through direct fraud against a court, as against the strong acid of a directly contrary statute. The court simply was saying that, under federal procedural law, one judicially derived value (the integrity of the judicial system) trumped another judicially derived value (the stability of judgments beyond the close of the "term").