UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

PAULINE STONEHILL,

Plaintiff, v. Civil Action No. 06-0599 (JDB) INTERNAL REVENUE SERVICE

Defendant.

MEMORANDUM OPINION

It has now been more than sixty years since the events that form the foundation of this

Freedom of Information Act (“FOIA”) case. In 1962, local authorities raided Henry S. Stonehill’s1

businesses in the Philippines, leading the IRS to bring a civil tax case against him and his associate.

Almost two decades went by before the IRS obtained a $17.6 million judgment against the men.

After another almost-two decades, Stonehill filed a FOIA request seeking documents related to the

raids to support his mission to reverse that tax judgment. Another decade and another FOIA

request later, this Court in 2008 granted partial summary judgment to both Stonehill and the IRS

on some document-withholding claims and to the IRS on the sufficiency of its search. Stonehill

v. I.R.S.,

(D.D.C. 2008). Now, almost seventeen years since that judgment,

1 Pauline Stonehill, Henry Stonehill’s wife and co-executor of his estate, became the plaintiff in this litigation when Henry died in 2002. Stonehill v. I.R.S.,

, 2 n.1 (D.D.C. 2008). Pauline then died in 2023. Statement of Fact of Death [ECF No. 73-2] at 1. Accordingly, Dr. Patrick Lenz moved to substitute himself as plaintiff under Federal Rule of Civil Procedure 25, asserting himself co-executor of Henry’s estate. Mot. for Substitution of Parties [ECF No. 73] at 1. In opposition to the motion, the IRS raises the same arguments that the National Archives and Records Administration (“NARA”) did when opposing Dr. Lenz’s motion to substitute in Stonehill v. Nat. Archives & Recs. Admin. (“NARA”), Civ. A. No. 22-3391 (CJN),

(D.D.C. Sept. 25, 2024). See generally Def.’s Resp. in Opp’n to Pl.’s Mot. to Substitute Parties [ECF No. 79]. In that case, the judge found NARA’s arguments unavailing and granted Lenz’s motion. NARA,

, at 5–8. This Court agrees and grants Dr. Lenz’s motion to substitute for the same reasons. See id.; see also First Am. Compl. for Inj. Relief (“Compl.”) [ECF No. 12] at 2 (“Plaintiff Pauline Stonehill is the Co-executor . . . of the Estate of Harry S. Stonehill.”); Def.’s Answer [ECF No. 6] at 1–8 (not raising the issue of whether an estate has statutory standing under FOIA).

1 Stonehill moves to set it aside under Federal Rule of Civil Procedure 60(b)(6) and this Court’s

inherent powers. Because neither avenue entitles Stonehill to such extraordinary relief, this Court

denies the motion.

BACKGROUND

I. Factual Background

The facts underlying this case are well documented by this Court and others. See, e.g.,

Stonehill, 534 F. Supp. 2d at 3–6; Stonehill v. U.S. Dep’t of Just. Crim. Div., Civ. A. No. 22-311

(JEB),

, at *1–2 (D.D.C. July 21, 2023); Stonehill v. Nat. Archives & Recs.

Admin. (“NARA”), Civ. A. No. 22-3391 (CJN),

, at *1–2 (D.D.C. Sept. 25,

2024); Stonehill v. I.R.S. (“Stonehill II”), Civ. A. No. 19-cv-3644 (RDM),

, at

*1–2 (D.D.C. Mar. 22, 2021); Stonehill v. I.R.S.,

(D.C. Cir. 2009) (collecting

opinions relating to the civil tax case against Stonehill). What matters for the disposition of the

instant motion is the ongoing dispute over eighty-six boxes of responsive documents. 2

In 1998 and 2001, Henry Stonehill filed identical FOIA requests with the IRS seeking

documents related to him and his associate. Stonehill, 534 F. Supp. 2d at 2–3. In its initial response

to those requests, the IRS identified only eight boxes of responsive documents. Decl. of Richard

D. Fultz, June 5, 2005 [ECF No. 77–11 at 24 of 118] (“Fultz Decl.”) ¶¶ 2–3. Yet upon review of

the eight boxes, the IRS found an SF-135, a form NARA uses to record its transmission and receipt

of agency records. See Email from Mae J. Lew to Richard D. Fultz (Dec. 4, 2003) [ECF No. 77–

4 at 8 of 74] (“Lew Email”); Recs. Transmittal & Receipts, SF-135, Nat’l Archives,

2 The IRS attorneys’ declarations submitted in this case “were inconsistent as to whether the IRS had located 82 out of 84 boxes or 84 out of 86,” but “the parties here seem to have settled on the 86 figure.” Stonehill II,

, at *1 n.1; Pl.’s Corrected Mem. in Supp. of Mot. for Relief from J. Pursuant to Rule 60(b)(6) & the Ct.’s Inherent Power [ECF No. 77-3] (“Mot.”) at 36; Def.’s Resp. in Opp’n to Pl.’s Mot. for Relief from J. Pursuant to 60(b)(6) & Ct.’s Inherent Powers [ECF No. 78] at 8 n.4.

2 https://perma.cc/934S-4XDX. The SF-135 stated that in 1981, the IRS sent eighty-six boxes of

records related to the IRS’s civil tax case against Stonehill to the Washington National Records

Center (“WNRC”). Lew Email; see also Fultz Decl. ¶ 5. But when the IRS went to the WNRC in

2001 to review those boxes, they found only eighty-four boxes. Lew Email; Fultz Decl. ¶ 5. The

WNRC did not have boxes 17 and 83 nor any record of their location, so the IRS and NARA

deemed them missing. See Lew Email; Fultz Decl. ¶¶ 5–6; Stonehill II,

, at *1.

II. Procedural History

This Court’s involvement in the Stonehill saga began in 2006 when Stonehill filed a

complaint alleging that the IRS improperly withheld documents in response to the 1998 and 2001

FOIA requests. See generally First Am. Compl. for Inj. Relief [ECF No. 12] (“Compl.”). In

response to the complaint, the IRS produced many additional documents, but it also withheld many

others pursuant to various privileges and FOIA exemptions. Stonehill, 534 F. Supp. 2d at 4–5

(explaining the IRS’s justifications for withholding); see also

(b). Stonehill, in turn,

contested the withholdings. See Stonehill,

. Eventually, the IRS moved for

summary judgment on the issue of whether it had conducted a sufficient search for responsive

documents, as well as on whether it properly withheld certain documents. 3 Stonehill opposed the

IRS’s motions and filed a cross-motion for summary judgment. Pl.’s Opp. to Def.’s Mot. for

Partial Summ. J. & Cross-Mot. for Partial Summ. J. [ECF No. 51]. Nowhere in her opposition,

motion, or memorandum did Stonehill contest whether the IRS’s search was reasonable. See

3 The IRS filed five motions for partial summary judgment. Stonehill,

. The first motion argued that summary judgment was appropriate on the issue of reasonable search, see Def.’s Mot. for Partial Summ. J. [ECF No. 27] at 8–16, as well as on issues of withholding certain documents, see

at 16–35. The motions that followed incorporated by reference the arguments as to reasonable search and addressed the withholding of other documents. See generally Def.’s Second Mot. for Partial Summ. J. [ECF No. 33]; Def.’s Third Mot. for Partial Summ. J. [ECF No. 36]; Def.’s Fourth Mot. for Partial Summ. J. [ECF No. 39]; Def.’s Fifth Mot. for Partial Summ. J. [ECF No. 42].

3 at 22–43. She only contested and moved for summary judgment on the issue of the propriety of

the IRS’s withholdings.

On January 10, 2008, this Court granted in part and denied in part both the IRS’s and

Stonehill’s motions for summary judgment. Stonehill,

. On Stonehill’s

motion, this Court agreed that the IRS was collaterally estopped from asserting the attorney-client

privilege over certain documents and that the IRS could not withhold the name of an IRS agent

pursuant to particular FOIA exemptions. See

at 6–9, 10–13; Order Granting in Part & Den. in

Part the IRS’s Various Mot. for Summ. J. & Granting in Part and Den. in Part Pl.’s Cross-Mot. for

Summ. J. [ECF No. 64] (“Order”) at 1–2. This Court granted the IRS’s motions and denied

Stonehill’s motion in “all other respects,” which included rejecting Stonehill’s argument that the

IRS had waived FOIA Exemptions 6 and 7(c) 4 by not raising the exemptions in the parallel,

ongoing civil tax litigation. Order at 2; Stonehill, 534 F. Supp. 2d at 10–13. Stonehill then

appealed the latter, but the D.C. Circuit affirmed this Court’s grant of summary judgment.

Stonehill,

.

Now, in 2024, Stonehill seeks relief from this Court’s 2008 judgment. In her motion for

relief under Rule 60(b)(6) and this Court’s inherent powers, Stonehill argues that the IRS

committed fraud on this Court by deeming boxes 17 and 83 missing, because it knew the boxes

were never lost and was keeping the boxes hidden in a safe to avoid production. See Pl.’s

Corrected Mem. in Supp. of Mot. for Relief from J. Pursuant to Rule 60(b)(6) & the Ct.’s Inherent

Power [ECF No. 77-3] (“Mot.”) at 1–4. Stonehill argues the IRS and its attorneys either

intentionally or recklessly made false statements and introduced false evidence to this Court,

4 FOIA Exemptions 6 and 7(c), respectively, exempt records “the disclosure of which would constitute a clearly unwarranted invasion of personal privacy,”

(b)(6), and “records . . . compiled for law enforcement purposes . . . [that] could reasonably be expected to constitute an unwarranted invasion of personal privacy,”

§ 557(b)(7)(C).

4 including two IRS attorneys’ declarations that were part of the summary judgment record. See id.

at 1–14; see generally Lew Email; Fultz Decl. To support her argument that the IRS knew the

boxes were not missing, Stonehill primarily relies on documents she obtained in FOIA litigation

that followed this Court’s 2008 judgment. Id. at 1. These documents include: (1) a March 31,

2022, declaration by IRS attorney Helene R. Newsome stating the acting director of the NARA

informed Newsome that, in 2021, NARA conducted a “manual check . . . of each numbered

[Stonehill] box” and found “that Boxes 17 and 83 . . . were stored in their appropriate locations at

the WRNC” and that NARA had no record that the two boxes were ever missing, Second Decl. of

Helene R. Newsome [ECF No. 77-12 at 27 of 94] (“Newsome Declaration”) ¶ 76; 5 and (2) NARA

refiling labels that show that a box numbered 17 was refiled with NARA in 2013 and a box

numbered 83 was refiled with the agency in 2009 and 2013, see E-mail from Brewer Thompson,

Deputy FOIA Officer/Archivist, NARA, to Robert E. Heggestad (May 24, 2023) [ECF No. 77-21]

at 35 of 128, 123–24 of 128. 6

ANALYSIS

Stonehill moves for relief from judgment under both Rule 60(b)(6) and this Court’s

inherent power to set aside a judgment for fraud on the court. But the former is untimely and

Stonehill fails to establish she is entitled to the latter.

I. Federal Rule of Civil Procedure 60(b)(6)

5 This declaration was submitted in Stonehill II, which centered around a FOIA request Stonehill made for documents related to the IRS’s responses to the 1998 and 2001 FOIA requests. See

at *2. Notably, the judge in that case determined that there was no “evidence of lying by the IRS or efforts by Department of Justice lawyers or individuals working at the IRS to hide facts or engage in fraud on the Court” regarding boxes 17 and 83. Tr. of Mot. Hr’g at 15, Stonehill II,

[ECF 78-1] at 15:17–21. 6 These labels were uncovered in NARA,

, which centered around Stonehill’s FOIA request for documents related to NARA’s “storage transfer, and review of IRS and DOJ records about the Stonehill proceedings.” Id. at *1 (internal quotation marks omitted).

5 Federal Rule of Civil Procedure 60(b) specifies five reasons a court may set aside a

judgment: (1) “mistake . . . or excusable neglect,” (2) “newly discovered evidence,” (3) “fraud . . .

misrepresentation, or misconduct by an opposing party,” (4) “the judgment is void,” and (5) “the

judgment has been satisfied.” Fed. R. Civ. P. 60(b)(1)–(5). Rule 60(b)(6) then adds a sort of

catchall, permitting a court to set aside a judgment for “any other reason that justifies relief.”

Here, Stonehill alleges she’s entitled to relief from judgment because the IRS knowingly

or recklessly submitted false testimony and made false statements to this Court. These allegations

sound in “fraud . . . misrepresentation, or misconduct by an opposing party.” Rule 60(b)(3). Yet

a Rule 60(b)(3) motion “must be made . . . no more than a year after the entry of the judgment.”

Rule 60(c)(1). Given that the judgment here was entered almost 17 years ago, this deadline has

long passed.

Likely because a motion under Rule 60(b)(3) would be untimely, Stonehill moves under

Rule 60(b)(6). Unlike Rule 60(b)(3) motions, Rule 60(b)(6) motions need only be made “within

a reasonable time.” Rule 60(c)(1). So Stonehill’s motion could be timely. 7 As the IRS rightly

contends, however, this tried-and-true workaround fails. Def.’s Resp. in Opp’n to Pl.’s Mot. for

Relief from J. Pursuant to 60(b)(6) & Ct.’s Inherent Powers [ECF No. 78] at 15–16. “[C]ourts

have universally interpreted ‘other’” in Rule 60(b)(6) “to mean other than the reasons specified in

subsections 60(b)(1)–60(b)(5).” Baltia Air Lines, Inc. v. Transaction Mgmt., Inc.,

(D.C. Cir. 1996) (quoting Williamsburg Wax Museum, Inc. v. Historic Figures, Inc.,

(D.C. Cir. 1987)). Otherwise, “the time limitations on motions under 60(b)(1)–(3)”

would be rendered “meaningless.”

Hence, because Stonehill seeks “relief for reasons covered

7 But see Carvajal v. Drug Enf’t Admin.,

, 26–27 (D.D.C. 2012) (explaining that “[i]n this Circuit, courts almost uniformly deny Rule 60(b)(6) motions as untimely when they are filed more than three months after judgment . . . [unless] plaintiff bore no fault for the delay and filed the motion as soon as feasible”).

6 by subsection (b)(3), she [i]s not able to rely on subsection (b)(6).” In re Trigee Found., Inc.,

(D.D.C. 2018). Stonehill’s Rule 60(b)(6) motion is equivalent to a Rule

60(b)(3) motion and thus this Court denies it as time-barred. See Khan v. Obama, Civ. A. No. 08-

1101 (JDB),

, at *17 (D.D.C. Sept. 2, 2014).

II. Fraud on the Court

While Rule 60(b) enumerates reasons for which a court may set aside a judgment, it “does

not limit a court’s power to . . . set aside a judgment for fraud on the court.” Fed. R. Civ. P.

60(d)(3); 11 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2870 (3d ed.

2024) (hereinafter “Federal Practice”) (“The power to vacate a judgment that has been obtained

by fraud upon the court is inherent in courts.”). And, unlike a Rule 60(b) motion, a motion pursuant

to a court’s inherent powers may be made “at any time” for “after-discovered fraud upon the

court.” Dausuel v. Dausuel,

(D.C. Cir. 1952); see Bowie v. Maddox,

(D.D.C. 2010). Stonehill’s motion for relief from judgment pursuant to this

Court’s inherent powers is thus timely.

But vaulting the timeliness hurdle only forces Stonehill to confront a larger obstacle: the

extraordinarily high standard for establishing fraud on the court. Fraud on the court is different

than “ordinary fraud.” See Bowie,

n.2. It includes only “egregious”

conduct that “subvert[s] the integrity of the court itself, or is a fraud perpetrated by officers of the

court so that the judicial machinery cannot perform . . . its impartial task of adjudging cases.”

at 278 (quoting Synanon Church v. United States,

(D.D.C. 1984)); see also

Lockwood v. Bowles,

(D.D.C. 1969) (“[I]n order to set aside a judgment . . .

because of fraud upon the court . . . it is necessary to show an unconscionable plan or scheme

which is designed to improperly influence the court in its decision.” (citation omitted)). Put

7 differently, “[f]raud upon the court refers only to ‘very unusual cases involving far more than an

injury to a single litigant.’” Baltia Air Lines, 98 F.3d at 642–43 (quoting Charles A. Wright, Arthur

R. Miller & Mary Kay Kane, Federal Practice & Procedure § 2870 (1995)). What is more, the

fraud must have been committed intentionally, willfully, or recklessly. Bowie,

. And the movant must establish all this by “clear and convincing evidence.”

Stonehill does not meet this high bar for three separate reasons. To begin, the fraud

Stonehill alleges is that the IRS and its attorneys submitted false declarations stating that boxes 17

and 83 were lost and otherwise lied to the Court about those boxes. See Mot. at 61 (“[T]he records

produced by NARA and the email correspondence produced by the IRS during recent FOIA

litigation[] confirm that the IRS knew that Boxes 17 and 83 were never lost and that [two] . . .

[d]eclarations filed by the IRS . . . were false.”). But “fraudulent documents, false statements, and

perjury . . . do not generally constitute fraud on the court.” Davis v. U.S. Dep’t of Health & Hum.

Servs.,

(D.D.C. 2013); Baltia Air Lines,

. That is because

such acts are considered “fraud between the parties” rather than fraud “directed to the judicial

machinery itself.” Baltia Air Lines,

; Khan,

, at *19. And that is

true even when the acts were committed by a party’s attorney. See Davis,

(determining party did not establish fraud on the court when his “principal allegation . . . [wa]s

that federal government attorneys” made misrepresentations to the court); More v. Lew,

, 30 & n.3 (D.D.C. 2014) (similar). Thus, even assuming Stonehill’s allegations

are true, she still fails to establish fraud on the court.

That raises the second reason that Stonehill’s claim of fraud on the court fails: she does not

establish the alleged fraud by clear and convincing evidence. The Newsome Declaration and the

NARA records she relies upon show, at most, that NARA had a Stonehill box numbered 83 in

8 2009, a box numbered 17 in 2013, and boxes numbered 17 and 83 in 2021. From this, Stonehill

concludes that, while this case was occurring from 2006 to 2008, the IRS and its lawyers knew or

should have known the boxes originally labeled 17 and 83 were never missing. But these

documents are far removed from the IRS and even farther removed from the IRS’s conduct in this

case. The actions described in the Newsome Declaration and the refiling labels were NARA’s,

not the IRS’s; and, more to the point, the shipments reflected in the labels and the NARA acting

director’s search of the boxes occurred years after this litigation was terminated. The documents

thus do not establish anything about what the IRS and its declarants knew or should have known

about the boxes during the course of this case. 8 Indeed, the evidence instead consistently reflects

that the IRS only received 84 boxes from NARA in 2001, with boxes 17 and 83 being absent. 9

Second, the IRS provides an at least possible explanation for why there may have been Stonehill

boxes numbered 17 and 83 after this case was terminated, but not in 2001: the IRS created two

additional boxes, and renumbered all the boxes, after some of the original boxes fell apart. See

Email from Natalie McKinney to Mae J. Lew (Jan. 24, 2014) [ECF No. 77–4 at 64 of 74]. In short,

Stonehill relies on conclusions and suppositions rather than clear and convincing evidence of

intentional, egregious fraud. That’s insufficient to establish fraud on the court. See United States

v. Est. of Stonehill,

(9th Cir. 2011); Wright & Miller, Federal Practice § 2870.

Finally, Stonehill does not provide evidence that this Court was misled in making the

judgment she seeks to set aside. See Davis,

. The IRS’s averments that

8 This Court also notes that the NARA acting director’s statement that NARA did not have records of boxes 17 and 83 being lost does not clearly and convincingly show that the boxes were actually never lost, let alone that the IRS knew or should have known they were not lost during the relevant timeframe. See Email from Christopher Pinkney, NARA Acting Dir., to George Lassiter (Aug. 3, 2015) [ECF No. 77-4 at 70–74 of 74] (explaining that NARA could not confirm box records from before 2009, when NARA began using an electronic record system). 9 Lew Email; Fultz Decl. ¶ 6; Email from Mae J. Lew to Christopher B. Sterner & Drita Tonuzi (Jan. 23, 2014) [ECF No. 77-4 at 60–62 of 74]; Decl. of Richard D. Fultz, March 16, 2007 [ECF No. 77-11 at 3–7 of 118] ¶ 5; Letter from Caroll Field to Robert E. Heggestad (Nov. 14, 2002) [ECF No. 77-6 at 21–37 of 102].

9 boxes 17 and 83 were lost at the time of its initial response to the FOIA requests neither influenced

nor were relevant to this Court’s determinations as to whether the IRS properly withheld

responsive documents. Those determinations were based on whether the privileges and FOIA

exemptions that the IRS had invoked applied to the documents the IRS actually admitted to finding.

See Stonehill, 534 F. Supp. 2d at 6–13. And the statements about boxes 17 and 83 did not impact

this Court’s grant of summary judgment to the IRS on the issue of reasonable search, either.

Stonehill did not contest the IRS’s motion on that issue, so the Court granted the motion without

needing to address the search for boxes 17 and 83—or for any documents whatsoever. Without

any “proof [or] evidence that” the information the IRS allegedly lied about “would . . . have been

relevant” to this Court’s judgment, the extraordinary step of setting it aside for fraud on the court

is not justified. Davis,

.

CONCLUSION

Stonehill’s motion for relief from judgment under Rule 60(b)(6) is untimely, and she fails

to establish fraud on the court. Accordingly, this Court denies Stonehill’s motion and leaves intact

the nearly two-decades-old judgment in this case. A separate order consistent with this

memorandum opinion shall issue on this date.

/s/ JOHN D. BATES United States District Judge Dated: November 5, 2024

10