City of Great Falls v. U.S. Dept. of Labor

• Decision Date: 05 April 1982
• Docket Number: No. 80-7395,80-7395
• Citation: 673 F.2d 1065
• Parties: CITY OF GREAT FALLS, Petitioner-Appellant, v. UNITED STATES DEPARTMENT OF LABOR, et al., Respondents-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1065

673 F.2d 1065

CITY OF GREAT FALLS, Petitioner-Appellant, v. UNITED STATES DEPARTMENT OF LABOR, et al., Respondents-Appellees.

No. 80-7395.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 7, 1981.

Decided April 5, 1982.

David V. Gliko, Great Falls, Mont., for petitioner-appellant.

Harry L. Sheinfeld, Washington, D. C., Patrick F. Flaherty, Boulder, Mont., for respondents-appellees.

Petition for Review of Order of Administrative Law Judge, U. S. Department of Labor.

Before BROWNING, Chief Judge, WRIGHT, Circuit Judge, and THOMPSON, ^* District Judge.

PER CURIAM:

This is a petition to review final action by the Secretary of Labor under the Comprehensive Employment and Training Act of 1973 (CETA), as revised by the Comprehensive Employment and Training Act Amendments of 1978 (CETA) (29 U.S.C. § 801 et seq.). Jurisdiction is vested in the United States Court of Appeals (29 U.S.C. § 817).

The facts were stipulated and are undisputed. The Governor's Employment and Training Council of Montana (GETC), a "prime sponsor" operating and receiving moneys under CETA, sub-granted a portion of its allocation to Great Falls. In 1974, Parks was denied employment pursuant to an unwritten local anti-nepotism policy which precluded employment in the same city department of members of the same family. Upon Parks' filing of a grievance with the prime sponsor under procedures established pursuant to 29 C.F.R. § 98.26 (1975), the hearing officer on June 9, 1978 determined the provision violated CETA regulations only because it was unwritten but found he did not have the authority to order reinstatement or payment of back wages. Thereafter, the executive officer of the prime sponsor confirmed the decision on the merits but ordered back pay. In April, 1979, the Regional Administrator of the U. S. Department of Labor affirmed the award and additionally awarded interest. That order was in turn affirmed on review by an Administrative Law Judge (ALJ) and has become the final decision of the Secretary of Labor. 20 C.F.R. §§ 676.88, 676.91(f) (1980). Great Falls seeks review solely to challenge the Secretary's authority to make a back pay award.

The 1973 Act concerned itself almost exclusively with the cooperative plans to be developed by the individual states and with the enforcement of CETA policies against the recipients of federal funds allocated in implementation of the plans. The enforcement sanctions of the 1973 Act (29 U.S.C. §§ 818(b)(2) and 818(d)) provided for the revocation of the plan or the withholding of funds if violations of the 1973 Act were found to exist. In the instant case, Great Falls' unwritten nepotism policy was deemed an artificial barrier to employment proscribed by the Act (29 U.S.C. § 884). Only one section of the 1973 Act dealt with rights of aggrieved individuals. Section 991 of Title 29 U.S.C., pertains to "nondiscrimination." Section 991(a) provides that "No person shall on the ground of race, color, national origin or sex be excluded from participation in, be denied benefits ... under this chapter." Section 991(d), in substance, incorporates certain provisions of the Civil Rights Act of 1964 and provides: "This section shall not be construed as affecting any other legal remedy that a person may have if that person is excluded from participation in, denied the benefits of, subjected to discrimination under, or denied employment in connection with any program or activity receiving assistance under this chapter." This statute recognizing actionable rights of certain aggrieved persons concededly has no application to applicant Parks inasmuch as he was not a victim of discrimination. ¹

On October 27, 1978, while Parks' appeal was still pending, Congress created new rights and a new remedy by passing 29 U.S.C. § 816(f). Pursuant to the authority of 816(f), on May 15, 1979, the Secretary promulgated 20 C.F.R. § 676.91(c) which specifically allows for back pay awards. We are thus faced with the question of whether the 1978 statute and regulation apply to this case.

The United States Supreme Court has stated the controlling rule of law as follows: "... a court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary." Bradley v. School Board of City of Richmond, 416 U.S. 696, 712, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974). The origin and the justification for this rule are found in the words of Mr. Chief Justice Marshall in United States v. Schooner Peggy, 1 Cranch 103, 2 L.Ed. 49 (1801):

It is in the general true that the province of an appellate court is only to enquire whether a judgment when rendered was erroneous or not. But if subsequent to the judgment and before the decision of the appellate court, a law intervenes and positively changes the rule which governs, the law must be obeyed, or its obligation denied. If the law be constitutional ... I know of no court which can contest its obligation. It is true that in mere private cases between individuals, a court will and ought to struggle hard against a construction which will, by a retrospective operation, affect the rights of parties, but in great national concerns ... the court must decide according to existing laws, and if it be necessary to set aside a judgment, rightful when rendered, but which cannot be affirmed but in violation of law, the judgment must be set aside.

In this case, there is no statutory direction or legislative history indicating that section 816(f) should not be applied retroactively. Therefore, unless manifest injustice will occur, the court must apply section 816(f) and uphold the award of back pay.

In determining whether it would work an injustice to apply a change in law to a pending case, the Supreme Court has directed courts to consider "(a) the nature and identity of the parties, (b) the nature of their rights, and (c) the nature of the impact of the change in law on those rights." Bradley v. School Board of City of Richmond, supra, 416 U.S. at 718, 94 S.Ct. at 2019. No one factor is dispositive, and there is a general presumption that changes in law apply to cases being reviewed on appeal. See Dobbins v. Schweiker, 641 F.2d 1354, 1360 n.8 (9th Cir. 1981).

In discussing the first factor, the Supreme Court has distinguished litigation involving "great national concerns," and parties who are public entities, from private cases between individuals. Id., 416 U.S. at 718-19, 94 S.Ct. at 2019-20, citing Schooner Peggy, supra, 1 Cranch at 110. But cf. Gulf Offshore Co. v. Mobil Oil Corp., --- U.S. ----, ---- n.16, 101 S.Ct. 2870, 2879 n.16, 69 L.Ed.2d 784 (1981) (law affecting damages applied retroactively even in private suit where no issue of great national concern). The Secretary of Labor and the City of Great Falls are public entities, and this factor favors application of the new law. See Hill v. United States, 571 F.2d 1098, 1102 (9th Cir. 1978). On the other hand, this case does not involve issues of great national concern. Parks did not vindicate a policy of national importance. As a result of this protracted litigation, the city was merely required to put in writing an otherwise valid hiring policy. The city's violation was a minor deviation. There was no finding that the city engaged in any of the more serious program abuses prohibited by section 816. Therefore, the application of existing law to this case will not further an important congressionally expressed federal policy.

The second factor requires us to consider the nature of the rights affected by the retroactive application of the change in law. In this regard, the issue is whether application of the new law "would infringe upon or deprive a person of a right that had matured or become unconditional." United States v. Fresno Unified School District, 592 F.2d 1088, 1094 (9th Cir. 1979). Great Falls had no vested or unconditional right to CETA funds. Cf. Jensen v. Gulf Oil Refining & Marketing Co., 623 F.2d 406, 411 (5th Cir. 1980). However, the 1978 amendments subjected CETA participants to new, unanticipated liability for noncompliance with the regulations. The Secretary did not promulgate regulations expressly authorizing back pay awards as a sanction for noncompliance until after the enactment of the 1978 amendment. Although there appears to have been some uncertainty in the law prior thereto, ² this case...