Showing of Extraordinary or Exceptional Circumstances Required To Vacate Consent Judgment

Case: Ford Motor Company v. Mustangs Unlimited, Inc., No. 06-1537 (6th Cir. May 24, 2007)

The One Sentence Summary: Mustangs Unlimited successfully appealed the district court's grant of Ford's motion to set aside a consent judgment entered after the parties voluntarily settled an action brought by Ford alleging that Mustangs Unlimited committed trademark counterfeiting, trademark infringement, trademark dilution, and unfair competition in violation of the Lanham Act and Michigan law.

Sixth Circuit Holdings:

• The district court's grant of Ford's Rule 60(b)(6) motion to set aside a consent judgment was vacated and case was remanded for further proceedings.


• Subsection (b)(6) of Rule 60 applies in "extraordinary or exceptional circumstances" and should only be used by courts "as a means to achieve substantial justice" due to the public policy favoring finality of judgments.


• A breach of a settlement agreement by itself does not warrant relief under Rule 60(b)(6).


• Even though Ford alleged that Mustangs Unlimited breached the terms of the parties' settlement agreement by continuing to sell counterfeited products and merchandise bearing Ford's name or marks, the district court abused its discretion because it did not determine that the circumstances were extraordinary or exceptional.


• On remand, the district court "should expressly determine whether - and if so, how - Ford's evidence establishes extraordinary or exceptional circumstances sufficient to warrant Rule 60(b)(6) relief."