Beer v. United States

• Decision Date: 17 February 2012
• Docket Number: No. 2010–5012.,2010–5012.
• Citation: 671 F.3d 1299
• Parties: Peter H. BEER, Terry J. Hatter, Jr., Richard A. Paez, Laurence H. Silberman, A. Wallace Tashima and U.W. Clemon, Plaintiffs–Appellants, v. UNITED STATES, Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

671 F.3d 1299

Peter H. BEER, Terry J. Hatter, Jr., Richard A. Paez, Laurence H. Silberman, A. Wallace Tashima and U.W. Clemon, Plaintiffs–Appellants,

v.UNITED STATES, Defendant–Appellee.

No. 2010–5012.

United States Court of Appeals, Federal Circuit.

Feb. 17, 2012.

Christopher Landau, Kirkland & Ellis, LLP, of Washington, DC, argued for plaintiffs-appellants. With him on the brief were John C. O'Quinn and K. Winn Allen.

Brian M. Simkin, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for the defendant-appellee. With him on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Michael S. Macko, Trial Attorney.

Jeffrey A. Lamken, MoloLamken LLP, of Washington, DC, for amicus curiae. With him on the brief were Martin V. Totaro and Lucas M. Walker.Before BRYSON, MAYER, and DYK, Circuit Judges.

ORDER

DYK, Circuit Judge.

This case returns to us on remand from the Supreme Court. The Court ordered us to determine “the question of preclusion.” Beer v. United States, ––– U.S. ––––, 131 S.Ct. 2865, 2865, 180 L.Ed.2d 909 (2011). We hold that the plaintiffs' claims are not precluded by our prior decision in Williams v. United States, 240 F.3d 1019 (Fed.Cir.2001), cert. denied, 535 U.S. 911, 122 S.Ct. 1221, 152 L.Ed.2d 153 (2002). But, as Williams remains binding precedent on this panel, we again affirm the judgment of the Court of Federal Claims granting summary judgment in favor of the government.

BACKGROUND

This case involves the question of whether various congressional enactments violate the Compensation Clause by reducing the compensation of Article III federal judges. The Ethics Reform Act of 1989 (“the ERA”), Pub. L. No. 101–194, 103 Stat. 1716, put in place a system whereby federal judges were to receive yearly cost-of-living salary adjustments (“COLAs”). Under the ERA, once a determination was made by Congress that COLAs would be given to federal employees on the General Schedule for a given year, COLAs would also be granted to federal judges, “effective at the beginning of the first applicable pay period” for the COLAs on the General Schedule, 28 U.S.C. § 461(a)(1), and up to a maximum of five percent each year, ERA § 704(a)(1)(B).

Prior to the calendar years 1995, 1996, 1997, and 1999, in which COLAs were provided to General Schedule employees, Congress passed separate legislation that blocked the payment of COLAs to federal judges.¹ See Treasury, Postal Service and General Government Appropriations Act of 1995 § 630(a), 108 Stat. at 2424 (blocking 1995 COLA); Treasury, Postal Service and General Government Appropriations Act of 1996, Pub. L. No. 104–52, § 633, 109 Stat. 468, 507 (1995) (blocking 1996 COLA); Omnibus Consolidated Appropriations Act of 1997, Pub. L. No. 104–208, § 637, 110 Stat. 3009, 3009–364 (1996) (blocking 1997 COLA); Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999, Pub. L. No. 105–277, § 621, 112 Stat. 2681, 2681–518 (1998) (blocking 1999 COLA). Each of those blocking acts became law prior to first day of the year that the blocking became effective, i.e., before the first day when federal judges would have received the adjustment to their salaries.

In 1997, a group of Article III federal judges filed a class action complaint in the United States District Court for the District of Columbia, alleging that the blocking legislation for the years 1995, 1996, and 1997, violated the Compensation Clause by diminishing their compensation. Jurisdiction was predicated on the Little Tucker Act, 28 U.S.C. § 1346, and, after an amendment to the complaint, on the district court's general federal question jurisdiction, 28 U.S.C. § 1331. The plaintiffs' requested relief was framed as declaratory relief, asking the court, for example, to “declare” that the blocking legislation was “unconstitutional and void,” and to “declare” that the plaintiffs were “entitled to damages in an amount to be determined by the Court.” Complaint at 18, Williams v. United States, 48 F.Supp.2d 52 (D.D.C.1999) (No. 97–CV–3106).

Federal Rule of Civil Procedure 23 provides for two types of class actions that could potentially be certified in the circumstances of the Williams case—a Rule 23(b)(2) class action or a Rule 23(b)(3) class action. A Rule 23(b)(2) class action involves requests for “injunctive relief or corresponding declaratory relief” and does not in terms require notice to the class. See Fed.R.Civ.P. 23(c)(2)(A). It also does not require opt-out procedures. A Rule 23(b)(3) class action typically involves claims for past damages and requires notice and opt-out procedures. See Fed.R.Civ.P. 23(c)(2)(B). The district court in Williams certified the class under Rule 23(b)(2), with the class including “[a]ll persons who served as Judges of the United States pursuant to Article III of the Constitution” at any time during the years 1995, 1996, and 1997. Class Certification Order at 2, Williams, 48 F.Supp.2d 52 (No. 97–CV–3106). According to the minimum requirements for Rule 23(b)(2) classes, the court did not provide the absent class members with notice or an opportunity to opt out of the litigation. See id.

On July 15, 1999, the district court in Williams held that the blocking statutes for the years 1995, 1996, and 1997, violated the Compensation Clause. 48 F.Supp.2d at 65. Thus the class was declared to be “entitled to cost-of-living adjustments for 1995, 1996 and 1997, together with all other benefits which should have accrued to them based upon those adjustments.” Id. In another class action filed in the same district court by the same Williams plaintiffs, the district court considered the blocking legislation for 1999. The district court ordered that “the plaintiffs and the members of their class shall receive ... cost-of-living adjustment[s], pursuant to the Ethics Reform Act of 1989, for fiscal year 1999, together with all other benefits which should have accrued to them based upon those adjustments.” Order, Williams v. United States, No. 99–CV–1982, slip op. at 1–2 (D.D.C. Dec. 29, 1999). In a later filed opinion, the district court explained that, similar to its holding in Williams, 48 F.Supp.2d 52, with respect to the 1995, 1996, and 1997 blocking statutes, the blocking statute for 1999 also violated the Compensation Clause. Memorandum, Williams v. United States, No. 99–CV–1982, slip op. at 4 (D.D.C. Jan. 13, 2000). We consolidated these two class actions on appeal, see Williams v. United States, 240 F.3d at 1025 n. 1, and they are collectively referred to as the “ Williams litigation.”

On appeal, this court held that “the district court possessed Little Tucker Act jurisdiction,” “at least as to the Judges' prayer for relief for the 1995 year, since each individual judge would receive less than $10,000 for the unpaid COLA for that year.” Williams, 240 F.3d at 1025. With respect to the merits of the case, we held that the blocking legislation at least for 1995, preventing COLAs established in the ERA from taking effect (before those COLAs “vested”), was not unconstitutional. Id. at 1032, 1039–40. In this respect, we held that the result was dictated by the Supreme Court's decision in United States v. Will, 449 U.S. 200, 101 S.Ct. 471, 66 L.Ed.2d 392 (1980). One judge dissented. On February 16, 2001, the same day that a panel of this court decided Williams, the court declined to hear the case en banc, with three judges dissenting. Williams v. United States, 264 F.3d 1089 (Fed.Cir.2001). Subsequently, the Supreme Court denied the plaintiffs' petition for certiorari, with three Justices dissenting. Williams v. United States, 535 U.S. 911, 122 S.Ct. 1221, 152 L.Ed.2d 153 (2002).

On November 28, 2001, Congress enacted further legislation affecting judicial pay. See Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act of 2002, Pub. L. No. 107–77, § 625, 115 Stat. 748, 803 (2001) (the “2001 legislation”). Instead of proceeding in a piecemeal fashion to block the COLAs, the 2001 legislation broadly provided:

[N]one of the funds appropriated by this joint resolution or by any other Act shall be obligated or expended to increase ... any salary of any Federal judge or Justice of the Supreme Court, except as may be specifically authorized by Act of Congress hereafter enacted.... This section shall apply to fiscal year 1981 and each fiscal year thereafter.

Act of Dec. 15, 1981, Pub. L. No. 97–92, § 140, 95 Stat. 1183, 1200, amended by § 625, 115 Stat. at 803. For fiscal year 2007, Congress enacted legislation providing COLAs for federal employees on the General Schedule, but did not enact legislation providing COLAs for federal judges, and accordingly, federal judges received no COLA for that year. Article III judges were granted COLAs in years 2002, 2003, 2004, 2005, 2006, and 2008, but these adjustments did not reflect the disputed 1995, 1996, 1997, and 1999 COLAs.

On January 16, 2009, the plaintiffs, all members of the certified class in Williams, but not named plaintiffs in the Williams litigation, filed the present suit in the Court of Federal Claims under the Tucker Act, seeking back pay for the failure to receive COLAs in 1995, 1996, 1997, 1999, and 2007, as well as declaratory relief that Congress may not in the future withhold COLAs as provided by the ERA. The plaintiffs pointed out that, not only did each denial of COLAs impact judicial salaries for that year, but it also affected the base salaries from which COLAs were or were not granted in subsequent years.

The government moved for summary judgment on the ground that, as a matter of stare decisis, the suit was barred by our Williams decision, and on the alternative ground that, inter alia, the suit was barred by “res judicata” because of the earlier Williams judgment. See Order, Beer v. United States, No. 09–37C, slip op. at 1 (Fed.Cl. Oct. 16, 2009). Although...