Aarp v. E.E.O.C.

Decision Date27 September 2005
Docket NumberNo. 05-CV-509.,05-CV-509.
Citation390 F.Supp.2d 437
PartiesAARP, et al., Plaintiffs, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant.
CourtU.S. District Court — Eastern District of Pennsylvania

Christopher G. Mackaronis, Brickfield Burchette Ritts & Stone, P.C., Laurie A. McCann, AARP Foundation Litigation, Michael J. Schrier, Bell Boyd & Lloyd PLLC, Washington, DC, Stephen G. Console, Console Law Offices LLC, Philadelphia, PA, for Plaintiffs.

Gillian Flory, Henry A. Azar, Jr., Jacqueline Eloine Coleman, Jennifer R. Rivera, U.S. Department of Justice, Douglas L. Greenfield, Bredhoff & Kaiser PLLC, Ann Elizabeth Reesman, Daniel Yager, McGuiness Norris & Williams LLP, Washington, DC, Joan K. Garner, U.S. Attorney's Office, Daniel P. O'Meara, Montgomery McCracken Walker & Rhoads, LLP, Philadelphia, PA, for Defendants.

MEMORANDUM AND ORDER

ANITA B. BRODY, District Judge.

I. INTRODUCTION

In this suit under the Administrative Procedure Act, 5 U.S.C. § 551 et seq. (the "APA"), the AARP challenges a regulation proposed by the Equal Employment Opportunity Commission (the "EEOC"). The proposed regulation would exempt certain employer practices from the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (the "ADEA"), as amended by the Older Workers Benefit Protection Act, Pub.L. No. 101-433 (1990) (the "OWBPA").1 Before me is the EEOC's motion to vacate this Court's Order of March 30, 2005, granting summary judgment to plaintiffs AARP, et al. (collectively referred to as "the AARP"). AARP v. EEOC, 383 F.Supp.2d 705, 2005 WL 723991 (E.D.Pa. Mar.30, 2005) ("AARP I"). EEOC moves for relief from judgment pursuant to Federal Rule of Civil Procedure 60(b), citing an intervening change in law as a result of the Supreme Court's recent decision in National Cable and Telecommunications Association v. Brand X Internet Services, ___ U.S. ___, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005). For the reasons set forth below, I will grant Defendant's motion.

II. BACKGROUND

On March 30, 2005, I permanently enjoined the EEOC from publishing or otherwise implementing a "Proposed Rulemaking"2 that would exempt from the prohibitions of the ADEA "the practice of altering, reducing, or eliminating employer-sponsored retiree health benefits when retirees become eligible for Medicare or a State-sponsored retiree health benefits program."3 68 Fed.Reg. 41542, 41542 (July 14, 2003); AARP I, 2005 WL 723991, at *6. Applying the test of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), I held that the challenged regulation was contrary to law and Congressional intent under the ADEA and its amendments. AARP I, 2005 WL 723991, at *6. In so holding, I expressly noted that I was bound by the Third Circuit's decision in Erie County Retirees Association v. County of Erie, 220 F.3d 193 (3d Cir.2000), and that Erie County required my conclusion that the regulation failed the first step of the Chevron test.

The EEOC filed a notice of appeal on May 31, 2005. On June 27, 2005, while the appeal was still pending, the U.S. Supreme Court decided National Cable and Telecommunications Association v. Brand X Internet Services, ___ U.S. ___, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005) ("Brand X"), which dramatically altered the respective roles of courts and agencies under Chevron. Brand X held that a court's interpretation of a statute only bars an agency from interpreting that statute differently from the court if the court has determined the only permissible meaning of the statute. See Brand X, 125 S.Ct. at 2701. Because the Third Circuit's Erie County decision did not determine the only permissible meaning of the relevant provisions of the ADEA, under Brand X, I am not bound by Erie County in reviewing the EEOC's regulation. Brand X also clarified the degree of deference due to agency interpretations under Chevron, and made it clear that the EEOC's exemption satisfies Chevron' s two-step test.

Because of the impact of Brand X on the continuing validity of my permanent injunction, I gave the EEOC leave to file a motion for relief from judgment pursuant to Rule 60(b). The Third Circuit stayed the appeal and remanded the case to me for consideration of this motion. (Order of 7/14/05.) Both parties submitted briefs on whether I should vacate my March 30, 2005 Order in light of Brand X, and I now vacate that Order. At this point, there are no genuine issues of material fact with respect to Count I of Plaintiffs' complaint, which alleged that the regulation was "arbitrary, capricious, and not in accordance with law." (Pls.' Compl. at 22.) Because Defendant is entitled to judgment as a matter of law, I will grant summary judgment to Defendant on Count I. Because my March 30, 2005 Order granted summary judgment for Plaintiffs on Count I, it was not necessary to reach Count II, alleging violations of the APA's notice-and-comment requirements. (Id.) Because there are no genuine issues of material fact with respect to this count, and Defendant is entitled to judgment as a matter of law, I will also grant summary judgment to Defendant on Count II.

My Order of March 30, 2005 permanently enjoined the EEOC from "publishing or otherwise implementing the regulation at issue in this case," AARP I, 2005 WL 723991, at *6, and I now dissolve that injunction. However, because the parties have already indicated their intention to appeal, I will stay the portion of this Order vacating the permanent injunction, so that the injunction will remain in effect pending appeal.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 60(b) provides:

On motion and upon such terms as are just, the court may relieve a party ... from a final judgment, order, or proceeding for the following reasons: ... (5) ... 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.

Fed.R.Civ.P. 60(b). It is appropriate to grant a Rule 60(b)(5) motion "when the party seeking relief from an injunction or consent decree can show `a significant change either in factual conditions or in law.'" Agostini v. Felton, 521 U.S. 203, 215, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997) (quoting Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 384, 112 S.Ct. 748, 116 L.Ed.2d 867 (1992)). A change in law can also qualify as one of the "other reasons" justifying relief under Rule 60(b)(6). While "[i]ntervening developments in the law by themselves rarely constitute the extraordinary circumstances required for relief under Rule 60(b)(6)," Agostini, 521 U.S. at 239, 117 S.Ct. 1997, "a supervening change in governing law that calls into question the correctness of the court's judgment may ... constitute such an extraordinary circumstance justifying the granting of a Rule 60(b) motion." United States v. Enigwe, 320 F.Supp.2d 301, 308 (E.D.Pa.2004) (internal citations omitted).4

Thus, I must determine whether the change in governing law occasioned by the Supreme Court'sBrand X decision has "call[ed] into question the correctness" of my earlier injunction, id., or made it "no longer equitable that the judgment should have prospective application," Fed.R.Civ.P. 60(b)(5). I will begin by summarizing my earlier opinion and the Supreme Court's decision in Brand X, and then analyze the effect of Brand X on the legal basis for my AARP I decision.

IV. DISCUSSION
A. Earlier Opinion

The AARP brought suit to enjoin the EEOC from implementing a rule that would permit employers who provide healthcare benefits to retired employees to decrease those benefits when employees become eligible for Medicare. AARP I, 2005 WL 723991, at *1. The AARP argued that the regulation violated section 4(a)(1) of the ADEA,5 and was thus "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" under the APA, 5 U.S.C. § 706(2). (Pls.' Compl. at 22.) The AARP claimed that the regulation was foreclosed by the Third Circuit's interpretation of section 4(a)(1) in Erie County Retirees Association v. County of Erie, 220 F.3d 193 (3d Cir.2000). In Erie County, the Third Circuit held that the ADEA's prohibitions applied to the practice of coordinating retiree healthcare benefits with Medicare eligibility, and that an employer could not reduce benefits to Medicare-eligible retirees unless it could meet the conditions of the "equal benefit or equal cost" safe harbor of the ADEA, 29 U.S.C. § 623(f)(2)(B)(i).6 In AARP I, while not disputing the holding of Erie County,7 the EEOC claimed that the regulation at issue fell within its authority under section 9 of the ADEA, which gives the EEOC power "to issue such rules and regulations as it may consider necessary or appropriate for carrying out this chapter" and "to establish ... reasonable exemptions to and from any or all provisions of this chapter as it may find necessary and proper in the public interest." 29 U.S.C. § 628.

Because I was asked to review an administrative agency rule for its consistency with congressional intent, I applied the familiar two-part Chevron test to the challenged regulation. See Chevron, 467 U.S. at 843, 104 S.Ct. 2778; Marincas v. Lewis, 92 F.3d 195, 200 (3d Cir.1996). The first step of the Chevron test asks "whether there is a clear and unambiguous congressional intent concerning the precise question in issue." Marincas, 92 F.3d at 200; see Chevron, 467 U.S. at 843, 104 S.Ct. 2778. In answering this question, I noted that I did not write on a clean slate, but rather was bound by the Third Circuit's decision in Erie County that the ADEA prohibited the employer practice at issue. AARP I, 2005 WL 723991, at *3.

In Erie County, the Third Circuit analyzed whether Medicare coordination of retiree health benefits constituted "discriminat[ion] against any individual with respect to his compensation, terms, conditions, or privileges...

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