                                      PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
              ________________

                    No. 16-3244
                 ________________

         IN RE: ANDREW E. BRESSMAN,
                                  Debtor

     JAMES A. BAXTER; ANDREW BAXTER;
    J.A. BAXTER LIFE INVESTMENT TRUST;
      RICHARD KATZ; ROBERT THOMAS;
    EGI 1985 RETIREMENT BENEFIT TRUST

                          v.

             ANDREW E. BRESSMAN


JAMES A. BAXTER, individually and as successor-in-
 interest to the James A. Baxter Life Investment Trust;
       RICHARD KATZ; ROBERT THOMAS,
                                       Appellants
                   ________________

   On Appeal from the United States District Court
            for the District of New Jersey
             (D. N.J. No. 2-14-cv-05314)
     District Judge: Honorable Kevin McNulty
                 ________________
                Argued on March 20, 2017

   Before: AMBRO, JORDAN and ROTH, Circuit Judges

             (Opinion filed: October 18, 2017)

Max Folkenflik         [Argued]
Folkenflik & McGerity
1500 Broad Street
21st Floor
New York, NY 10036
                  Counsel for Appellants

Ryan T. Jareck
Cole Schotz
1325 Avenue of the Americas
New York, NY 10019

Michael D. Sirota         [Argued]
Warren A. Usatine
Cole Schotz
25 Main Street
Court Plaza North, P.O. Box 800
Hackensack, NJ 07601
                    Counsel for Appellee

                    ________________

                        OPINION
                    ________________




                              2
ROTH, Circuit Judge

        In this appeal we are asked to decide whether Max
Folkenflik, Esq., committed fraud on the court.            The
Bankruptcy Court determined that Folkenflik had intentionally
deceived the court. As a result, the court vacated the default
judgment it had previously entered in favor of Folkenflik’s
clients. The District Court affirmed. Finding no error, we will
affirm.

                               I.

        This action was commenced as an adversary complaint
in a Chapter 11 bankruptcy proceeding brought by Andrew
Bressman. The Plaintiffs are victims of fraudulent activities
by Bressman. In the 1990’s, Bressman and others had engaged
in manipulation of stock prices. The Plaintiffs brought civil
securities fraud and Racketeer Influenced and Corrupt
Organizations Act (RICO) claims against Bressman and his co-
defendants in the United States District Court for the Southern
District of New York. The Plaintiffs were represented by
Folkenflik. These civil actions against Bressman were stayed
when Bressman filed for bankruptcy in the Bankruptcy Court
for the District of New Jersey. In response, the Plaintiffs filed
the adversary complaint against Bressman.

       The civil securities fraud and RICO claims continued
against Bressman’s co-defendants before Judge John Koeltl in
the Southern District of New York. On August 13, 1998,
claims against the co-defendants in one of the suits were settled
for $6,250,000. On August 28, Folkenflik, as attorney for
Plaintiffs, received the full settlement amount, minus a $75,000
prompt payment discount. The parties’ Settlement Agreement,




                               3
approved by Judge Koeltl, was subject to a confidentiality
order, which incorporated the following language from the
parties’ stipulated confidentiality agreement:

        It is hereby stipulated, consented and agreed to
        by counsel for the parties in this action, that they
        will not disseminate and/or publicize the
        existence of or disclose the financial terms of any
        settlement agreement with any defendants,
        except as further set forth in this Stipulation and
        order; that this confidentiality provision does not
        prohibit or restrict the parties from responding to
        any inquiry about the documents produced or
        their underlying facts and circumstances by any
        state or federal regulatory agency, including the
        Securities and Exchange Commission or any
        self-regulatory organization . . ..1

The adversary proceeding continued against Bressman in the
Bankruptcy Court.

       Several months after the Settlement Agreement was
reached and the funds received, the Plaintiffs sought a default
judgment in the Bankruptcy Court against Bressman. The
court ordered them to submit an affidavit detailing their
damages. In March 1999, Folkenflik, as their attorney,
submitted an affidavit that recounted the history of the
proceedings against Bressman and his co-defendants. The
affidavit indicated that the damages totaled $5,195,081 plus
interest.    Although Folkenflik’s affidavit provided a
comprehensive account of the underlying proceedings, it made


1
    App. A38.




                                 4
no mention of the $6.25 million settlement that he had obtained
against Bressman’s co-defendants or even of the fact of the
settlement. Explicitly noting its reliance on Folkenflik’s
affidavit, the Bankruptcy Court entered a default judgment
against Bressman for $5,195,081 on February 7, 2000. The
Bankruptcy Court ordered Folkenflik to submit a separate
application for RICO damages. In September 2002, the
Plaintiffs filed an application for RICO damages and attorneys’
fees. No mention was made in that application that the
Plaintiffs had already been paid $6,175,00 on account of their
losses. In July 2003, still unaware of the Settlement
Agreement, the Bankruptcy Court entered a RICO judgment
for treble damages, totaling $15,585,243. The court noted that
this “amount constitute[d] treble the damages found and
awarded by this Court as Plaintiff’s out-of-pocket losses . . ..”2
The court also awarded $910,855.93 in attorneys’ fees.3

       Bressman was incarcerated from 2003 until 2006 in
connection with his conviction in New York state court for
enterprise corruption and grand larceny. During that time and
the seven years that followed, Folkenflik made no attempt to
recover on the default judgment because, in his view, the
likelihood of Bressman having substantial assets was remote.
In 2013, however, Folkenflik learned that Bressman was going
to receive a potential payment of $10 million, so Folkenflik set
out to have the $15,585,243 judgment satisfied. He filed ex
parte applications on behalf of the Plaintiffs in the Southern
District of New York and in the District of New Jersey to
appoint a receiver to search for and seize Bressman’s assets.


2
    App. A267-68.
3
    App. A268.




                                5
        The court in New Jersey expressed skepticism that
emergency ex parte relief was warranted, given Folkenflik’s
failure to collect for ten years. The application was denied in
open court and was withdrawn the same day. In New York,
Judge Ramos granted the application on September 26, 2013.
On October 2, Folkenflik filed a new application in the District
of New Jersey asking the court to authorize the receiver, who
had been appointed by the Southern District of New York, to
act in New Jersey. Contrary to Local Rule, Folkenflik did not
mark on the civil cover sheet that this action was related to the
unsuccessful application that he had filed in the District of New
Jersey several days earlier.4 As a result, the case was assigned
to a different judge who granted the ex parte application.
Searches and seizures were executed in New York and New
Jersey on October 11.

       In declarations appended to Plaintiffs’ ex parte
applications, Folkenflik indicated that, as a result of post-
judgment interest, the judgment against Bressman totaled
$30,895,913.39. Nothing in these submissions indicated that
Folkenflik had already collected $6.25 million on behalf of the
Plaintiffs. Indeed, in his brief in support of his application in
the Southern District of New York, Folkenflik stated: “With
post judgment interest, the Judgment’s current value is
$30,895,913.39. To date – more than ten years later – Plaintiffs
have not seen a dime of this amount.”5

4
  During a sanctions hearing before the Southern District of
New York, the court found “deeply troubling the suggestion
that [Folkenflik] did not completely, fairly, and accurately
disclose to [the District of New Jersey] the application they had
previously made . . ..” App. A43.
5
  App. A41.




                               6
        Then, on October 13, 2013, Bressman’s attorney, David
Wander, wrote to Folkenflik, asking if anyone had made
payments on the judgment.6 Folkenflik certified that it was not
until then that he looked at the docket sheet and saw that the
settlement was listed. On October 16, Folkenflik replied to
Wander, stating “[t]he complete and accurate response to your
specific question is no, there have not been any payments from
any source regarding the Bressman Judgment.”7 Folkenflik
added, in connection with this letter: “I . . . advised him of all
of the facts I thought I was allowed to advise him of, given the
public disclosure of the existence of the settlement, and that
was what I was able to say,”8 namely, that certain defendants
were dismissed from one of the civil actions, “subject to a
settlement agreement that was submitted to Judge Koeltl with
the confidentiality ‘so ordered’ and the agreement sealed by
the order of the Court in or about October 1998.”9 That action
was then marked closed. Folkenflik certified that he was not
aware of the reference to the settlement in the court docket until
October 2013.10
        October 2013 was the first time that the Bankruptcy
Court, the District Courts in New York and New Jersey, and




6
  App. A368.
7
  App. A41.
8
  App. A368.
9
  App. A509-10.
10
   App. A42.




                                7
Bressman11 learned that Folkenflik had successfully negotiated
a settlement agreement with Bressman’s co-defendants. The
orders granting the Plaintiffs’ ex parte applications were then
vacated in both courts and the seized materials were returned.

       On January 7, 2014, Judge Koeltl in the Southern
District of New York held a hearing to determine whether
Folkenflik was obligated to disclose the Settlement Agreement
and to whom. Folkenflik argued that, absent the confidentiality
order, he would have informed the Bankruptcy Court of the
Settlement Agreement even though he believed it was
“immaterial” and irrelevant to the underlying default
judgement.12 By oral order, the court instructed the parties to
provide counsel and all involved judges with details of the
Settlement Agreement.

11
   Although Bressman claims he was unaware of the Settlement
Agreement until October 16, 2013, Folkenflik argues
Bressman was aware of the Agreement as early as “sometime
in the 90’s.” Folkenflik also contends that Bressman had
constructive notice of the Settlement Agreement’s existence
because it was inadvertently disclosed on the Southern District
of New York’s public docket. The Bankruptcy Court did not
credit this assertion because “Folkenflik certifie[d] that he,
himself, was not aware of this public reference until October
2013.” App. A42. In any event, the date when Bressman
became aware of the Agreement is not germane to the merits
of our discussion. The inquiry here is primarily focused on the
representations that Folkenflik made to the Bankruptcy Court
when he appeared ex parte in 1999 and which he continued to
present to the Bankruptcy Court and the District Courts in the
following years.
12
   App. A384.




                              8
       On January 9, 2014, a hearing was held by Judge Ramos
in the Southern District of New York to determine whether
Folkenflik’s decision to file the ex parte application to collect
on the default judgment with no mention of the Settlement
Agreement constituted sanctionable misconduct. The judge
noted that the validity of the default judgment against
Bressman was not at issue in that hearing.13 At the conclusion
of the hearing, the court declined to impose sanctions.

        Bressman then asked the Bankruptcy Court for the
District of New Jersey to reopen the proceeding related to the
Plaintiffs’ adversary complaint, vacate the underlying default
and RICO judgments, and dismiss the Plaintiffs’ complaint
with prejudice on the grounds that the judgment was
fraudulently obtained. On March 20, 2014, the Bankruptcy
Court held a hearing. Bressman’s counsel argued that “if there
were ever a case to vacate a judgment based upon fraud on the
Court, it’s this case. There is no question that Mr. Folkenflik
intentionally concealed and affirmatively misrepresented
critical facts to this Court in an effort to obtain undeserved
double recovery for his clients and enormous fees for
himself.”14

       Folkenflik urged that he would have informed the
Bankruptcy Court of the Settlement Agreement if doing so had
not been prohibited by the confidentiality order. In the
alternative, Folkenflik argued that Bressman’s motion was
untimely.     The Bankruptcy Court rejected Folkenflik’s
contentions. Finding that Folkenflik’s conduct was intentional

13
     App. A497-98.
14
     App. A617.




                               9
and was the type of egregious misconduct that constitutes fraud
on the court, the Bankruptcy Court vacated the default
judgment and dismissed the adversary complaint with
prejudice. The District Court affirmed the Bankruptcy Court’s
order, and this appeal followed.

                               II.

      The District Court had jurisdiction to consider
Folkenflik’s appeal of the Bankruptcy Court’s order under 28
U.S.C. § 158(a)(1). We have jurisdiction pursuant to 28 U.S.C.
§ 158(d) and 28 U.S.C. § 1291.

       The Plaintiffs raise three arguments on appeal. First,
they contend that Bressman’s motion to vacate the default
judgment was time barred. Whether the underlying motion
was barred is a question of law, and as such our review is
plenary.15 Second, the Plaintiffs contend that Folkenflik’s
conduct does not rise to the level of egregious misconduct that
constitutes intentional fraud on the court. Because the facts are
not in dispute, we exercise plenary review of whether
Folkenflik committed intentional fraud.16          Finally, the
Plaintiffs claim that that the sanction of dismissal with
prejudice was an abuse of the Bankruptcy Court’s discretion.
As with other forms of equitable relief, our review of the
Bankruptcy Court’s decision to vacate the underlying default




15
    United States v. Hull, 456 F.3d 133, 137 (3d Cir. 2006)
(citation omitted).
16
   Id. (citation omitted).




                               10
judgment is for abuse of discretion.17 We review its findings
of fact for clear error.18

                               III.

                                A.

       The Plaintiffs first contend that the Bankruptcy Court’s
grant of relief was procedurally barred because Bressman’s
motion was filed more than ten years after the alleged
fraudulent conduct. In the alternative, the Plaintiffs assert that
the action was barred by the doctrine of laches. We disagree
with both contentions.

       Federal Rule of Civil Procedure 60(b) authorizes relief
from a final judgment on six separate grounds.19 Rule 60(b)(3)
specifically permits a court to relieve a party from a final
judgment for “fraud[,] . . . misrepresentation, or
misconduct[,]”20 and subsection 6 permits courts to do so for
“any other reason that justifies relief.”21 As the Plaintiffs note,
Rule 60 motions alleging fraud are ordinarily subject to a one-
year limitations period.22 Although they correctly recite the
Rule’s time bar, they do so to no avail. Rule 60 has no
applicability where, as here, a party requests relief from a final

17
   Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S.
238, 248 (1944); Groupe SEB USA, Inc. v. Euro-Pro Operating
LLC, 774 F.3d 192, 197 (3d Cir. 2014).
18
   Chemetron Corp. v. Jones, 72 F.3d 341, 345 (3d Cir. 1995).
19
   Fed. R. Civ. P. 60(b).
20
   Fed. R. Civ. P. 60(b)(3).
21
   Fed. R. Civ. P. 60(b)(6).
22
   Fed. R. Civ. P. 60(c)(1).




                                11
judgment in response to an opponent’s alleged fraud on the
court. We settled this issue in Averbach v. Rival Mfg. Co.,
where we held that “the one year time limit in the rule, by virtue
of the rule’s very text, does not apply to independent actions”
such as those for fraud on the court.23 Our decision in Herring
v. United States reaffirmed our holding in Averbach: “an
independent action alleging fraud upon the court is completely
distinct from a motion under Rule 60(b).”24

       This concept that the inherent power of federal courts to
vacate a fraudulently obtained judgment—even years after the
judgment was entered—has long been recognized by the
Supreme Court.25       Consistent with this precedent, the
bankruptcy court here granted the requested relief because it
found that Folkenflik committed fraud on the court. We
therefore see no basis to conclude that the time limits of Rule
60 barred the court’s consideration of the appellee’s motion to
vacate the underlying default judgment.

       The Plaintiffs’ contention that the doctrine of laches
counsels against vacating the underlying default judgment
similarly fails. “Laches is ‘a defense developed by courts of

23
    809 F.2d 1016, 1020 (3d Cir. 1987). Although Averbach
was an independent action, we noted there that “the elements
for a cause of action for such relief in an independent action
are not different from those elements in a Rule 60(b)(3) motion
. . ..” Id. at 1022-23.
24
    424 F.3d 384, 389 (3d Cir. 2005) (citation omitted).
25
    See Hazel-Atlas Glass Co., 322 U.S. at 248-49 (recognizing
that federal courts possess inherent power to vacate a judgment
obtained by fraud on the court); see also Plaut v. Spendthrift
Farm, Inc., 514 U.S. 211, 233-34 (1995) (same).




                               12
equity’ to protect defendants against ‘unreasonable, prejudicial
delay in commencing suit.’”26 The defense “applies in those
extraordinary cases where the plaintiff ‘unreasonably delays in
filing a suit,’ and, as a result, causes ‘unjust hardship’ to the
defendant. Its purpose is to avoid ‘inequity.’”27 The Plaintiffs
bear the burden of proving that the elements of laches—
“inexcusable delay in instituting suit and prejudice resulting to
the respondent from such delay”—are met.28 Arguing that
Bressman unjustifiably slept on his rights for ten years, the
Plaintiffs challenge the District Court’s conclusion that the
elements of laches are not present. However, because “[b]y its
very nature the doctrine [of laches] addresses itself to the sound
discretion of the trial judge[,] . . . absent an abuse of discretion,
we will not disturb the court’s determination.”29

       The Bankruptcy Court did not credit Folkenflik’s
assertion that Bressman was aware of the payment as early as
1999. On appeal, the District Court affirmed that laches were
not applicable here, stating:


26
   SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod.,
LLC, 137 S. Ct. 954, 960 (2017) (citing Petrella v. Metro-
Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1967, 1973 (2014)).
27
   Petrella, 134 S. Ct.at 1979 (Breyer, J., dissenting) (citations
omitted).
28
   Kane v. Union of Soviet Socialist Republics, 189 F.2d 303,
305 (3d Cir. 1951) (en banc); see also Waddell v. Small Tube
Prod., Inc., 799 F.2d 69, 74 (3d Cir. 1986) (“The party
asserting the defense . . . bears the burden of proof.” (citation
omitted)).
29
   Gruca v. U.S. Steel Corp., 495 F.2d 1252, 1258 (3d Cir.
1974) (citation omitted).




                                 13
       A vague statement about what Bressman
       “heard” at some unspecified time and place
       during the decade of the 1990’s is not much to
       go on. But in any event, I find that [the
       Bankruptcy Court] acted here within the law
       and the bounds of his discretion. . . . This was
       not an adversarial proceeding but an
       application for a default judgment. . . . Under
       the circumstances, [the Bankruptcy Court]
       could permissibly make an equitably based
       ruling “that a fraud committed upon the court
       could be time barred offends all notions of
       integrity and equity.       There can be no
       protections against such intentional conduct.”30

We agree. Accordingly, we cannot say the Bankruptcy Court
abused its discretion in concluding that Bressman’s motion
was not barred by the doctrine of laches.

                               B.

       We next address whether Folkenflik’s failure to disclose
the Settlement Agreement rises to the level of intentional fraud.
As officers of the court, attorneys are required “to conduct
themselves in a manner compatible with the role of courts in
the administration of justice.”31       This responsibility is
sometimes—albeit rarely—disregarded. When, however,

30
  App. A9-10, citing the Bankruptcy Court, App. A45.
31
   In re Snyder, 472 U.S. 634, 644-45 (1985); see also
Demjanjuk v. Petrovsky, 10 F.3d 338, 352 (6th Cir. 1993) (“As
an officer of the court, every attorney has a duty to be
completely honest in conducting litigation.”).




                               14
counsel has failed to act with candor, preservation of the
integrity of the judicial process may require courts to depart
from their usual adherence to the principle that final judgments
should be left undisturbed.32 We confront one such situation
here.

       A court may set aside a judgment based upon its finding
of fraud on the court when an officer of the court has engaged
in “egregious misconduct.”33 We have said that such a finding
“‘must be supported by clear, unequivocal and convincing
evidence’”34 of “(1) an intentional fraud; (2) by an officer of
the court; (3) which is directed at the court itself . . ..” 35 In
addition, fraud on the court may be found only where the
misconduct at issue has successfully deceived the court.36
Folkenflik contests the Bankruptcy Court’s findings on two




32
   See Hazel-Atlas Glass Co., 322 U.S. at 244 (recognizing that
that “under certain circumstances, one of which is after-
discovered fraud,” a court may exercise its equitable powers to
vacate judgments “to fulfill a universally recognized need for
correcting injustices which, in certain instances, are deemed
sufficiently gross to demand a departure from rigid adherence”
to the finality of judgments).
33
   Herring v. United States, 424 F.3d 384, 390 (3d Cir. 2005)
(quoting In re Coordinated Pretrial Proceedings in Antibiotic
Antitrust Actions, 538 F.2d 180, 195 (8th Cir. 1976) (internal
quotation marks omitted)).
34
   Id. at 387 (quoting In re Coordinated Pretrial Proceedings
in Antibiotic Antitrust Actions, 538 F.2d at 195).
35
   Id. at 390.
36
   Id.




                               15
grounds: First, he claims that any fraud was not intentional,37
and second, he argues that the alleged deceit does not constitute
the kind of egregious misconduct that the fraud on the court
doctrine aims to address. Both contentions are belied by the
properly found facts.

        Although direct evidence of intent will rarely be
available, it may be inferred from the surrounding
circumstances. Folkenflik’s intentions were clear: He set out
to recover the full amount of the default judgment without any
offset for the settlement with the co-defendants. Folkenflik’s
scheme manifested itself in early March of 1999 when he filed
an affidavit to support the default judgment he sought against
Bressman. The affidavit was comprehensive: It recounted the
history of the related proceedings, scrupulously detailed the
damages each Plaintiff sought, provided a calculation of
interest, and carefully described Folkenflik’s involvement in
the matter. Conspicuously, the affidavit omitted any mention
of the $6.25 million Folkenflik recovered on behalf his clients
several months earlier. As Folkenflik was aware, the
Bankruptcy Court was not presented with any information
from Plaintiffs’ adversaries or from any nonparty because
Folkenflik was appearing ex parte.
        While Folkenflik claims that he never intended to
collect on the judgment without first ensuring that the
appropriate offset would be applied, the record provides strong
support for a conclusion to the contrary. First, this contention
is discredited by Folkenflik’s own assertion that he was under
no obligation to inform the court of Bressman’s right to a set


37
  By considering this argument, we are in no way conceding
that fraud is not an intentional tort.




                               16
off.38 Second, Folkenflik indicated in his brief, supporting his
ex parte application for a receiver in the Southern District of
New York that “[w]ith post-judgment interest, the Judgment’s
current value is $30,895,913.39” and that “[t]o date – more
than ten years later – Plaintiffs have not seen a dime of this
amount.”39 This declaration, as with Folkenflik’s other
attestations throughout the underlying proceedings, is grossly
misleading and illustrates an intent to receive an unjustified
recovery.

        Folkenflik made a deceptive representation to the court
in his affidavit, obtained a default judgment, had it trebled, and
was awarded interest and attorneys’ fees. We have no trouble
concluding that his failure to disclose the settlement reflects his
intent to commit fraud on the court.40

       Folkenflik also asserts—indefatigably—that he would
have informed the court of the settlement payment had he not

38
   App. A384, A537-38.
39
   App. A303-04.
40
   The New York and New Jersey District Courts declined
Bressman’s invitation to impose sanctions in response to
Folkenflik’s lack of candor with respect to the 2013 ex parte
enforcement proceedings. Folkenflik argues that the courts’
refusal to impose sanctions demonstrates that he did not act
with the requisite intent. This argument is of no moment since
our determination is based on the deceptive representations
Folkenflik made in the 1999 Affidavit and not with his ex parte
enforcement applications. Further, it is not clear whether
considerations concerning sanctionable conduct are identical
or analogous to those concerning fraud on the court. We need
not make this determination today.




                                17
been barred from doing so by the confidentiality order. This
contention is unconvincing. Folkenflik was not, as he
suggests, left only with the options of concealment or
impermissible disclosure. He was aware that relevant facts
were being omitted from his affidavit. Even if he believed that
the confidentiality order prohibited him from disclosing to the
Bankruptcy Court the existence of the Settlement Agreement,
he could have so stated in his affidavit and have asked either –
or both – the District Court in the Southern District of New
York and the Bankruptcy Court in New Jersey for guidance.
His failure to do so is consistent with an intent to defraud the
court in order to maximize the recovery.

        Folkenflik’s alternative attempts to justify his
nondisclosure fare no better. He contends that he cannot be
held responsible for his omissions because he was not
obligated to inform the court of Bressman’s right to a setoff.41
In his view, Bressman had notice of the adversary proceedings,
failed to act, and therefore waived any defenses. Bressman
denies that he had any knowledge of the settlement until
October 2013. However, whether Bressman did or did not
have knowledge does not forgive Folkenflik for his
misrepresentations to the court. Moreover in this regard, any
right to set off is not relevant to Folkenflik’s failure to inform
the court of the fact of the settlement. In addition, Folkenflik’s
position is further compromised by the fact that Bressman was
absent. The ex parte nature of the proceedings was not a
license for Folkenflik to deceive the court by deliberately
failing to bring the material fact of the settlement to the court’s
attention.


41
     App. A537-38.




                                18
       In fact, Folkenflik’s duty to deal with the court honestly
and with integrity was particularly important in light of the
non-adversarial nature of the ex parte proceedings. In such a
proceeding, the court depends on the integrity of appearing
counsel because only he can ensure that the court has received
the full scope of information pertinent to the merits of its
considerations. Folkenflik was not only obligated to submit
truthful information, but he was also required to disclose to the
court any material information of which he was aware.
Because his failure to do so has sufficiently undermined the
judicial process, we conclude that a finding of fraud on the
court will lie.

        This determination brings us to Folkenflik’s next
argument: that a “fraud on the court”-based claim can succeed
only when it is based on perjurious misconduct. This
suggestion is based on an incorrect reading of our Herring
opinion, which establishes that perjury by a witness does not,
by itself, constitute fraud on the court.42 Understood in its
proper context, Herring’s pronouncement was appropriately
narrow and has no relevance here since Bressman’s motion
does not pertain to a witness who has allegedly committed
perjury. There is an important distinction between perjury that
is committed by a witness and fraudulent conduct that is
directed at the court by one of its own officers. The latter has
a much greater likelihood of undermining the working of the
normal process of adjudication because courts rely on the
integrity of their officers. Folkenflik is a licensed attorney who
exploited his privilege to practice before the courts by not
revealing the details of a relevant settlement payment. This


42
     424 F.3d at 390.




                               19
deceit maximized his clients’ recovery—and, in turn, his fee.
Herring is distinguishable.

        Having determined that the record evidences an
intentional scheme to improperly influence the court, we next
address whether Folkenflik’s ploy is the kind of misconduct
that the fraud on the court doctrine seeks to address. We
conclude that it is. The Supreme Court has warned that fraud
on the court actions must be “reserved for those cases of
‘injustices which, in certain instances, are deemed sufficiently
gross to demand a departure’ from rigid adherence to the
doctrine of res judicata.”43 Taking heed of this instruction, we
held in Herring that only “‘egregious misconduct . . . such as
bribery of a judge or jury or fabrication of evidence by
counsel’” can be characterized as the kind of fraud that
warrants relief from a judgment.44

       The facts here demonstrate “a deliberately planned and
carefully executed scheme to defraud . . ..” 45 In his affidavit
supporting his petition for a default judgment, Folkenflik
omitted that Bressman’s co-defendants had settled their claims
in one of the New York actions: conduct which is incapable of
innocent explanation. Folkenflik, in his capacity as an officer
of the court, made sworn averments to obtain a default
judgment and damages. Knowing that the averments had
omitted a material fact, Folkenflik nevertheless allowed the
Bankruptcy Court to rely upon their truthfulness. The court’s
reliance on the affidavit impugned its integrity.

43
   United States v. Beggerly, 524 U.S. 38, 46 (1998) (citing
Hazel-Atlas Glass Co., 322 U.S. at 244).
44
   424 F.3d at 390 (citation omitted).
45
   See Hazel-Atlas Glass, 322 U.S. at 245.




                              20
       We conclude that the misconduct at issue here is
sufficiently egregious. Because there is clear, unequivocal,
and convincing evidence showing that Folkenflik committed
fraud on the court, we will affirm the judgment of the District
Court.
                               C.

       Finally, Plaintiffs contend that the Bankruptcy Court
could not grant relief from the default judgment without first
weighing the factors set forth in Poulis v. State Farm Fire &
Casualty Co.46 This argument requires little discussion. “In
Poulis, we held that a district court must consider six factors
before it may dismiss a case as a sanction . . ..”47 We have
since required consideration of Poulis in only a limited number
of additional contexts.48 “Our application of Poulis in those
contexts comports with the underlying concern that Poulis
sought to address, namely that dismissal as a sanction before
adjudication of the merits deprives a party of her day in
court.”49 Our precedents have reaffirmed that the Poulis
factors are required to “preserve the ability of the parties to try
their cases on the merits.”50 These concerns are not present
here. In fact, the principle underlying Poulis, that disputes
should be decided on their merits, is the very basis for our




46
   747 F.2d 863 (3d Cir. 1984).
47
   Knoll v. City of Allentown, 707 F.3d 406, 408 (3d Cir. 2013).
48
   Id. at 409 (listing cases).
49
   Id.
50
   Id. at 410.




                                21
disfavor of default judgments.51 As set forth above, our review
of the decision to vacate a default judgment under the
circumstances presented here asks whether a court has abused
its discretion. Because the Bankruptcy Court has not done so,
we will affirm.52
                              IV.

        “Membership in the bar is a privilege burdened with
conditions.”53 Among the most oft-cited is the condition that
attorneys will honor the duty of loyalty they owe to each of
their clients. In so doing, attorneys must not—and in most
cases do not—disregard their inherent obligation to the system
of justice.54 Because Folkenflik has conducted himself in a
way that has improperly interfered with the administration of
justice, protection of the court’s integrity requires us to act. In
light of this responsibility, we will affirm the judgment of the
District Court.


51
   Harad v. Aetna Cas. & Sur. Co., 839 F.2d 979, 982 (3d Cir.
1988) (noting that we have “adopted a policy disfavoring
default judgments and encouraging decisions on the merits”
(citation omitted)).
52
   To the extent that Plaintiffs seek to use Poulis to challenge
the Bankruptcy Court’s decision to dismiss their underlying
action with prejudice, the Poulis factors are plainly satisfied.
In Poulis, we developed factors to consider when determining
if misconduct is grave enough to warrant the drastic sanction
of dismissal. Poulis, 747 F.2d at 868. A fraud on the court is
unquestionably such misconduct.
53
   In re Snyder, 472 U.S. at 644 (citation and internal quotation
marks omitted).
54
   Id.




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