575 F.2d 417 (3rd Cir. 1978), 77-1530, Marshall v. Board of Ed., Bergenfield, N. J.

Docket Nº:77-1530.
Citation:575 F.2d 417
Party Name:Ray MARSHALL, Secretary of Labor, United States Department of Labor, Appellee, v. BOARD OF EDUCATION, BERGENFIELD, NEW JERSEY, Appellant, Arthur E. Clementz, Individually and as President of the Board of Education, and Carl Ruess, Individually and as Secretary and Business Administrator of the Board.
Case Date:March 13, 1978
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 417

575 F.2d 417 (3rd Cir. 1978)

Ray MARSHALL, Secretary of Labor, United States Department

of Labor, Appellee,

v.

BOARD OF EDUCATION, BERGENFIELD, NEW JERSEY, Appellant,

Arthur E. Clementz, Individually and as President of the

Board of Education, and Carl Ruess, Individually and as

Secretary and Business Administrator of the Board.

No. 77-1530.

United States Court of Appeals, Third Circuit

March 13, 1978

Submitted Under Third Circuit Rule 12(6) Jan. 5, 1978.

Page 418

Carin Ann Clauss, Sol. of Labor, Donald S. Shire, Associate Sol., Jacob I. Karro, Lois

Page 419

G. Williams, Anastasia T. Dunau, Attys., U. S. Dept. of Labor, Washington, D. C., for appellee; Francis V. LaRuffa, Regional Sol., New York City, on the brief.

Major & Major, Hackensack, N. J., for appellant; James A. Major, II, Hackensack, N. J., of counsel.

Before GIBBONS and GARTH, Circuit Judges, and WEINER, [*] District Judge.

OPINION

GARTH, Circuit Judge.

This is an appeal from a denial of a motion made by the Bergenfield Board of Education (Board) pursuant to Fed.R.Civ.P. 60(b). 1

After the Supreme Court determined that states need not comply with federal wage and hour legislation, 2 the Board moved the district court to vacate its judgment which compelled payments of past overtime wages to employees and restrained, inter alia, future underpayment. The Board's motion was made some eight months after this court had affirmed the district court's judgment.

The district court vacated so much of its judgment as related to the prospective operation of its decree but refused to vacate its award of past wages. We affirm.

I.

The Secretary of Labor (Secretary) instituted this action in 1971 3 to enjoin the Board and other defendants 4 from violating certain provisions of the Fair Labor Standards Act of 1938 (Act) 5 which provide for minimum wages and maximum hours for employees. 6 On May 7, 1975, judgment for the Secretary was entered, ordering (1) future overtime payments and compliance by the Board with the Act's record-keeping provisions and (2) the payment of $5,570.43 in withheld past wages. Identifying by a separate schedule annexed to the judgment the particular employees and the amount of wages each of them was due, the court directed that a certified check totalling $5,570.43 for past wages be "made payable to the 'Wage and Hour Division Labor' and sent to the United States Department of Labor." 7 In February, 1976, this Court,

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rejecting the Board's plea to withhold decision pending the Supreme Court's determination of National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976) (see Brief for the Board at 7-8), summarily affirmed the May 7, 1975 Judgment (May 7th Judgment) of the district court. 530 F.2d 964 (3d Cir. 1976). The Board did not seek to appeal our Court's judgment to the United States Supreme Court, despite the Board's knowledge that National League was pending before that Court. Rather, in May, 1976, the Board, in satisfaction of the money judgment, delivered a check totalling $5,570.43 to the Secretary to cover the past wages withheld. 8

On June 24, 1976, the Supreme Court decided National League of Cities v. Usery, supra. Overruling Maryland v. Wirtz, 392 U.S. 183, 88 S.Ct. 2017, 20 L.Ed.2d 1020 (1968), the National League Court held that in most instances the Act could not constitutionally be applied to states and localities. The Court reasoned that:

insofar as (the minimum wage and maximum hour provisions of the Act) operate to directly displace the States' freedom to structure integral operations in areas of traditional governmental functions, they are not within the authority granted Congress.

Id. at 852, 96 S.Ct. at 2474. 9

In the wake of National League, state and local authorities inevitably challenged prior rulings which had applied the Act to them. 10 The Board as we have noted, having failed to seek review in the United States Supreme Court, then filed in the district court a motion pursuant to Fed.R.Civ.P. 60(b) to vacate the May 7th Judgment. That motion was filed on October 22, 1976, four months after National League was decided and eight months after this court had affirmed the district court's May 7, 1975 Judgment.

In response to the 60(b) motion, the district court, citing United States v. Swift & Co., 286 U.S. 106, 119, 52 S.Ct. 460, 76 L.Ed. 999 (1932), ruled that "equitable grounds have been established for modifying the injunction imposed upon defendants." 11 However, in considering whether to grant the Board's motion as to the money judgment totalling $5,570.43 that had been ordered, the district court ruled that it would not vacate that portion of the judgment. In so ruling, the district court relied upon and quoted Elgin National Watch Co. v. Barrett, 213 F.2d 776, 779 (5th Cir. 1954):

Page 421

even if (the statute upon which the action was based) was, or is, unconstitutional the judgment based upon it is not void. Until such a judgment is reversed or regularly set aside, it is valid and binding upon the parties thereto and their privies. It is the law of the case. . . . Such a judgment, even though subsequent decisions prove it erroneous, is not void and, since it is not, is not subject to vacation under Rule 60(b)(4), Federal Rules of Civil Procedure, 28 U.S.C.A. 12

On January 24, 1977, the district court's order reflecting these determinations was filed. It is from so much of that order that requires the Secretary to "distribute to defendant's employees in the manner set forth in said (May 7th) Judgment the sum of $5,570.43 paid to (the Secretary) by (the Board) on May 3, 1976" that the Board now appeals. 13

II

Fed.R.Civ.P. 60(b) provides in relevant part:

Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time . . . .

The motion filed by the Board on October 22, 1976 sought an order vacating the May 7th Judgment on the ground "that such Judgment is void, and on the further ground that it would be unequitable to enforce it against these defendants." 14 The motion was supported only by a memorandum of law.

The district court in its opinion recognized that the Board had failed to specify the particular subsections of Rule 60(b) on which it relied. Despite this omission and the failure of the Board to marshal affidavits or proofs in satisfaction of the strong showing required for the modification of a judgment, Mayberry v. Maroney, 558 F.2d 1159, 1163 (3d Cir. 1977) (Mayberry II ); see 11 C. Wright & A. Miller, Federal Practice and Procedure § 2863, at 207 (1973), the district court nevertheless proceeded to analyze the Board's contentions under subsections (4), (5) and (6). Under subsection (4) the district court, citing In re Four Seasons Securities Laws Litigation, 502 F.2d 834, 842 (10th Cir.), cert. denied, 419 U.S. 1034, 95 S.Ct. 516, 4 L.Ed.2d 309 (1974); Lubben v. Selective Service System Local Board No. 27, 453 F.2d 645, 649 (1st Cir. 1972); and 11 C. Wright & A. Miller, supra § 2862, at 200-01, 15 held that it had jurisdiction over the subject matter of the action when the May 7th Judgment was rendered, and that therefore the judgment was not void. 16 Under subsections (5) and (6), as we have previously noted the court modified the injunction

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as it would operate in the future, finding equitable grounds to do so in light of National League. 17 It refused, however, to vacate the money judgment which represented back wages due to the employees. Implicit in its January 11th Opinion and explicit in its order which followed the opinion 18 is the district court's recognition that the Board failed to make the requisite showing imposed upon a 60(b) movant.

A.

In the district court and on appeal, the Board primarily relied on subsection (4) of Rule 60(b) for relief from the money judgment entered by the district court. That subsection provides that a court may relieve a party from a final judgment if "the (final) judgment is void."

A judgment may indeed be void, and therefore subject to relief under 60(b) (4), if the court that rendered it lacked jurisdiction of the subject matter or the parties or entered "a decree which is not within the powers granted to it by the law." United States v. Walker, 109 U.S. 258, 265-67, 3 S.Ct. 277, 282, 27 L.Ed. 927 (1883); 7 J. Moore, Moore's Federal Practice P 60.25(2), at 301-06 (2d ed. 1975); 11 C. Wright & A. Miller, supra § 2862, at 198-200; see Lubben v. Selective Service System Local Board No. 27, supra, 453 F.2d at 649-50. 19 By contrast, a judgment is not void and is therefore not within the ambit of 60(b)(4) simply because it is erroneous, or is based upon precedent which is later deemed incorrect or unconstitutional. Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 374-78, 60 S.Ct. 317, 84 L.Ed. 329 (1940); Lubben v. Selective Service System Local Board No. 27, supra, 453 F.2d at 649-50; Elgin National Watch Co. v. Barrett, supra, 213 F.2d at 779; 7 Moore's Federal Practice, supra P 60.25(2), at 303-06; 11 C....

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