Curlott v. Campbell

• Decision Date: 18 June 1979
• Docket Number: Nos. 78-2037,78-2180,s. 78-2037
• Citation: 598 F.2d 1175
• Parties: Joseph E. CURLOTT et al., Plaintiffs-Appellees and Cross-Appellants, v. Alan CAMPBELL et al., Defendants-Appellants and Cross-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1175

598 F.2d 1175

Joseph E. CURLOTT et al., Plaintiffs-Appellees and Cross-Appellants, v. Alan CAMPBELL et al., Defendants-Appellants and Cross-Appellees.

Nos. 78-2037, 78-2180.

United States Court of Appeals, Ninth Circuit.

June 18, 1979.

John F. Cordes, Atty., Civ. Div., App. Section, Dept. of Justice, Washington, D.C., for defendants-appellants and cross-appellees.

Robert H. Wagstaff, of Wagstaff & Middleton, Anchorage, Alaska, for plaintiffs-appellees and cross-appellants.

Appeal from the United States District Court for the District of Alaska.

Before CHOY and SNEED, Circuit Judges, and INGRAM, ^* District Judge.

SNEED, Circuit Judge:

This case is brought by a group of federal employees who contest the Civil Service Commission's interpretation of an Executive Order that reduced plaintiffs' benefits. Both parties appeal from an interlocutory judgment that refused to hold the Commission in contempt of an earlier declaratory judgment but ordered the Commission to pay the disputed benefits until the completion of certain due process procedures. Jurisdiction is conferred on this court by 28 U.S.C. § 1292(a)(1) (1976). For the reasons given below we affirm that part of the order that held the Commission not in contempt, reverse as to the remainder and remand for further proceedings.

I.

FACTS.

The controversy concerns a change made by the defendant and appellant Civil Service Commission in the method of calculating the cost-of-living allowance (COLA) paid to federal civil employees living in Alaska. Established in 1948 by President Truman in Executive Order 10,000, codified at 5 U.S.C. § 5941 (1976), the COLA supplements the basic pay of federal employees living in designated nonforeign areas where the cost of living is substantially higher than in Washington, D.C.

Section 205(b)(2) of the Executive Order forms the focal point of the dispute. This section directs the Civil Service System in fixing the COLA rate to "make appropriate deductions when quarters or subsistence, commissary or other purchasing privileges Are furnished at a cost substantially lower than the prevailing local cost." (Emphasis added). In November 1976, the Commission issued new COLA rates applicable to federal employees living in Alaska. See 41 Fed.Reg. 51,579 (1976). These COLA rates reflected the Commission's adoption of an interpretation of "are furnished" that for the first time in Alaska provided for a reduction in the COLA whenever employees had Potential access to the enumerated privileges, regardless of whether the privileges were being received as a direct result of the individual's present federal civilian employment.

As soon as the new COLA rates became effective, this lawsuit was filed challenging the reduction. Plaintiffs and cross-appellants (Employees) represent three groups ¹ of presently employed federal civil workers whose COLA was reduced: (1) retired military persons who are entitled to military commissary and exchange; (2) spouses of retired military persons who are entitled to military commissary and exchange privileges; and (3) spouses of active duty military persons who are entitled to military commissary and exchange privileges as well as housing benefits. The Employees brought this action on several theories ² seeking to have the Commission's interpretation of the Executive Order overturned, to have the previous interpretation reinstated, and to require the Commission to conform its procedures to the requirements of constitutional due process.

The Commission filed a motion for summary judgment contending that all of the Employees' claims lacked merit. Employees, in turn filed a motion for partial summary judgment on three of their claims, stating factual disputes precluded summary judgment on the other claims. The district court issued an opinion and order on October 7, 1977, published at 438 F.Supp. 505, which upheld the Commission's interpretation of "are furnished," declined to reach several of the Employees' claims, and ruled that the Commission had violated the Employees' procedural due process rights in reducing their COLA without giving them notice and an opportunity to make written comments. See Curlott v. Hampton, 438 F.Supp. 505 (D. Alaska 1977). The court stated that "any reduction (of benefits) based upon . . . a change in interpretation must await the comment procedure." Id. at 509. On October 11, 1977, the district court entered a judgment incorporating these rulings and remanding the case to the Commission. Clerk's Record at 270. The Commission filed a notice of appeal; the Employees filed a notice of cross-appeal. On April 21, 1978, these appeals were dismissed by the Court of Appeals by stipulation of the parties pursuant to Fed.R.App.P. 42(b).

Because the Commission continued to pay the reduced COLA rates, the Employees requested an Order to Show Cause why the Commission should not be held in contempt for failure to comply with the district court's October 11, 1977 judgment. In an April 27, 1978 memorandum and order, from which the present appeals are taken, the district court ruled that, inasmuch as its October 11 judgment was declaratory rather than injunctive, the Commission should not be held in contempt. In order to effectuate the October 11 judgment, however, the court issued a two-part injunction (1) ordering the Commission to pay the Employees all funds which they would have received had the prior interpretation of "are furnished" been in effect since October 11, 1978, and (2) enjoining the Commission from paying the reduced COLA rate until the Commission completed the hearing procedure outlined in the October 7, 1977 memorandum. Clerk's Record at 290-91.

The Commission filed a timely notice of appeal; the Employees filed a timely notice of cross-appeal. The district court subsequently stayed its order until June 2, 1978. On June 1, 1978, this court granted the Commission's motion for a stay pending appeal. ³

The Employees contend that the sole question that this court may entertain on appeal is the authority of the district court to issue the April 27 injunction. They assert that the declaratory judgment of October 11 is an unappealed final judgment foreclosing such issues as are required by the principles of res judicata. The Commission challenges this contention, and maintains that the injunction must be reversed because the district court erred in finding that the Employees were entitled to due process proceedings prior to the reduction in the COLA rates.

We shall address initially the res judicata issue. Because we conclude that the October 11, 1977 judgment was not an appealable final order and that, as a consequence, it does not foreclose our consideration of the Commission's due process contentions, the balance of our discussion will focus on those contentions.

II.

APPLICABILITY OF RES JUDICATA.

To invoke res judicata under the circumstances of this case it must be established that the October 11 judgment was a final judgment subject to appeal within the time limits fixed by Rule 4(a), Fed.R.App.P. If the October judgment was appealable but unappealed, the issues contained therein are res judicata, whether the decision was right or wrong. Milne v. Deen, 121 U.S. 525, 532-34, 7 S.Ct. 1004, 30 L.Ed. 980 (1887). On the other hand, if the judgment was not appealable, we may review the district court's October 7 ruling as it relates to the Employees' due process rights.

The plaintiffs insist that the district judge intended the October 11 judgment to be final and appealable because he entered it on a form provided with the Federal Rules of Civil Procedure for entry of judgment pursuant to Fed.R.Civ.P. 58. See 6a Moore's Federal Practice P 58.01(1. 2); Clerk's Record at 270. Finality and appealability are prerequisites to our jurisdiction. These are imbedded in the statutes to which we must look for power to decide an appeal. See Carroll v. United States, 354 U.S. 394, 399, 77 S.Ct. 1332, 1 L.Ed.2d 1442 (1951). Thus, neither the forms nor the words used by the district judge determine whether a matter is appealable. See, e. g., Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737, 742, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976); Diversified Mortgage Investors v. U. S. Life Title Insurance Co., 544 F.2d 571, 578 (2d Cir. 1976) (Timbers, J., dissenting). It is to the applicable statutes, as interpreted by the courts, that we must look for "that clear statutory mandate" on which appealability of the October 11 judgment must rest. Carroll v. United States, supra.

A. 28 U.S.C. § 1291.

We commence with 28 U.S.C. § 1291, the statute that confers jurisdiction "of appeals from all final decisions of the district courts." The final judgment rule is "the dominant rule in federal appellate practice." DiBella v. United States, 369 U.S. 121, 126, 82 S.Ct. 654, 658, 7 L.Ed.2d 614 (1962). Congress has created only limited statutory exceptions, E. g.,28 U.S.C. § 1292 and 28 U.S.C. § 1651. ⁴ The rule rests primarily on a policy against piecemeal adjudication of claims. See Gardner v. Westinghouse Broadcasting Co., 437 U.S. 478, 480, 98 S.Ct. 2451, 57 L.Ed.2d 364 (1978). Avoidance of piecemeal litigation requires a "final decision" that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945). Finality, however, need not necessarily await "the last order possible to be made in a case." Gillespie v. United States Steel Corp., 379 U.S. 148, 152, 85 S.Ct. 308, 311, 13 L.Ed.2d 199 (1964). See Weingartner v. Union Oil Co., 431 F.2d 26, 27 (9th Cir. 1970), Cert. denied, 400 U.S. 1000, 91 S.Ct. 459, 27 L.Ed.2d 451 (1971). Always to do so would, by enthroning technicality, usurp the claims of justice. "(T)he most important competing considerations are 'the inconvenience and costs of piecemeal review on the one hand and the danger of denying justice by delay on the...