Liberty Mut. Ins. Co. v. E.E.O.C.
| Decision Date | 26 October 1982 |
| Docket Number | No. 82-5005,82-5005 |
| Citation | 691 F.2d 438 |
| Parties | 35 Fair Empl.Prac.Cas. 574, 30 Empl. Prac. Dec. P 33,116 LIBERTY MUTUAL INSURANCE COMPANY, etc., et al., Plaintiffs-Appellees, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, et al., Defendants, and State of California Fair Employment and Housing Commission (successor to defendant State of California Fair Employment Practice Commission), et al., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Charles M. Kagay, Deputy Atty. Gen., San Francisco, Cal., argued, for defendants-appellants; Marian M. Johnston, Deputy Atty. Gen., San Francisco, Cal., on brief.
S. Richard Pincus, Fox & Grove, Chicago, Ill., for plaintiffs-appellees.
Appeal from the United States District Court for the Central District of California.
Before ELY, GOODWIN and NELSON, Circuit Judges.
The State of California Fair Employment Practice Commission appeals from the grant of a Fed.R.Civ.P. 60 motion striking its Fed.R.Civ.P. 68 costs award. It contends that the motion had to be brought under Fed.R.Civ.P. 59(e) and was therefore untimely. In the alternative, it contends that the district court was required to award costs. We hold that the motion was correctly brought under Rule 60 and that the district court erred in granting that motion to delete the state's award of costs. We therefore reverse in part and remand for the district court to enter an award of costs in favor of defendants in accordance with this opinion.
Liberty Mutual Insurance Company and other insurance companies (Liberty) filed a claim against the State of California Fair Employment Practice Commission. They sought declaratory and injunctive relief from certain investigations and disclosures by the state.
On June 21, 1978, the state offered, pursuant to Fed.R.Civ.P. 68, 1 to consent to a judgment enjoining it from disclosure of information made confidential by law and awarding Liberty accrued costs. Liberty did not accept this offer.
Cross motions for summary judgment were filed. The state's motion consented to the entry of the injunction contained in its Rule 68 offer, and argued, therefore, that no further relief was warranted.
The district court denied Liberty's motion and granted the state's. It then entered an injunction against the state that included the offered judgment and other provisions. The state moved to amend the judgment to strike the additional provisions added by the district court and to award it costs under Rule 68. The motion was denied.
On appeal, another panel of this court reversed in part, and remanded. Liberty Mutual Insurance Co. et al. v. California, 652 F.2d 63 (9th Cir. 1981) (unpublished). The panel struck the additional provisions of the injunction and awarded the state its costs on appeal. The injunction, as modified, was therefore identical to the state's offer of judgment.
On remand, the district court entered a new judgment in accordance with this court's mandate. It enjoined the state as offered and awarded it costs.
Liberty then moved under Fed.R.Civ.P. 60(a) and (b) 2 to "correct" the judgment to delete the costs award. Liberty argued that the original denial of costs had been affirmed by this court on appeal, and that the award was therefore barred. The district court granted Liberty's motion, from which the state filed a timely appeal.
The following issues are raised on appeal:
(1) Did the district court have power under Rule 60 to correct its award of costs?
(2) Did the district court err in granting Liberty's Rule 60 motion to correct the judgment and deny the state costs?
The district court corrected its judgment pursuant to Rule 60, 3 to delete an award of costs in the district court. Although the district court's memorandum does not specifically so state, it appears that the district court agreed with Liberty that it was bound by this court's previous decision, i.e., the law of the case.
The state argues that, insofar as Liberty's Rule 60 motion was based on the failure of the district court to follow the law of the case, it was based on an error of law. 7 J. Moore & J. Lucas, Moore's Federal Practice P 60.19, at 226 (2d ed. 1982) (whether a Rule 60 motion states any reason for relief usually involves a question of power, and hence, an issue law). The question of law thus presented is freely reviewable on appeal. Alonzo v. ACF Property Management, Inc., 643 F.2d 578, 579 (9th Cir. 1981).
The state relies on authority from another circuit for the proposition that errors of law are not cognizable under Rule 60. E.g., Scola v. Boat Frances, R., Inc., 618 F.2d 147 (1st Cir. 1980). Rather, the state argues that such a motion must be filed under Fed.R.Civ.P. 59(e), 4 and, since Liberty's motion was not filed within 10 days of entry of judgment, the district court lacked jurisdiction under that rule. See Browder v. Director, 434 U.S. 257, 98 S.Ct. 556, 54 L.Ed.2d 521 (1978).
The circuits are split as to whether errors of law may be corrected under Rule 60 motions. 7 J. Moore & J. Lucas, Moore's Federal Practice P 60.22(3) (2d ed. 1982); 11 C. Wright & A. Miller, Federal Practice and Procedure § 2858, at 176-80 (1973 & Supp. 1982); 1 ALR Fed. 771 (1969 & Supp.1981). See generally Note, Federal Rule 60(b): Finality of Civil Judgments v. Self-Correction by District Court of Judicial Error of Law, 43 Notre Dame Law. 98 (1967). The law in this circuit is that errors of law are cognizable under Rule 60(b). Gila River Ranch, Inc. v. United States, 368 F.2d 354, 356 (9th Cir. 1966).
We hold that the district court did have power under Rule 60(b)(1) to reconsider its award of costs. 5
Liberty argues, and the district court apparently believed, that this court's decision in Liberty Mutual Insurance Co. et al. v. California, 652 F.2d 63 (9th Cir. 1981) (unpublished), decided the costs question in Liberty's favor. We disagree.
Lower courts are free to decide issues on remand so long as they were not decided on a prior appeal. Quern v. Jordan, 440 U.S. 332, 347 n.18, 99 S.Ct. 1139, 1148 n.18, 59 L.Ed.2d 358, 370 n.18 (1979); 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4478, at 793 (1981). Thus, the law of the case would preclude the district court from reconsidering only issues decided explicitly or by necessary implication in this court's previous disposition. Conway v. Chemical Leaman Tank Lines, Inc., 644 F.2d 1059, 1062 (5th Cir. 1981); 18 C. Wright, A. Miller & E. Cooper, supra, P 4478, at 789.
Although in its previous appeal the state contested the district court's denial of costs, our prior disposition awarded the state only its costs on appeal. The disposition was completely silent as to the issue of costs in the district court. Liberty argues that this silence amounts to an implicit denial of costs in the district court. There is no reason, however, why our earlier silence did not simply leave the matter of costs open for consideration by the district court on remand. See Perkins v. Standard Oil of California, 399 U.S. 222, 223, 90 S.Ct. 1989, 1990, 26 L.Ed.2d 534, 536 (1970) (per curiam) ("Our failure to make explicit mention in the mandate of attorneys' fees simply left the matter open for consideration by the District Court, to which the mandate was directed."). Thus, we hold that the law of the case did not require the district court to grant Liberty's Rule 60 motion.
Awards of costs under Rule 68 are limited to situations where "the judgment finally obtained by the offeree is not more favorable than the offer." See note 1, supra. Liberty contends that because the judgment was entered on a grant of summary judgment to the state, it was "obtained by" the defendant.
The recent Supreme Court case of Delta Air Lines, Inc. v. August, 450 U.S. 346, 101 S.Ct. 1146, 67 L.Ed.2d 287 (1981), construed Rule 68 as inapplicable to situations where the defendant, after making a settlement offer, obtained the judgment. Id. at 352, 101 S.Ct. at 1150, 67 L.Ed.2d at 292. Liberty contends that Rule 68 is similarly inapplicable in the present case because the judgment was entered on a grant of summary judgment to the state.
Liberty's reliance on Delta Air Lines is misplaced. In its motion for summary judgment, the state moved to allow judgment to be entered against it, under the same terms as its previous Rule 68 offer. This motion the district court granted. 6 The Court in Delta Air Lines stated that Rule 68 Id. at 351, 101 S.Ct. at 1150, 67 L.Ed.2d at 292; see id. at 352 n.9, 101 S.Ct. at 1150 n.9, 67 L.Ed.2d at 293 n.9. We therefore hold as a matter of law that Rule 68 applies to the present case.
Liberty's final argument is that the district court had discretion to deny costs under Rule 68. We find this contention, as well, to be without merit. Although the district court normally has discretion under Fed.R.Civ.P. 54(d) 7 as to whether to award costs to the prevailing party, where a Rule 68 offer is made and the judgment finally obtained by the plaintiff is not more favorable than the offer, he must pay the costs incurred after the asking of the offer. This language is mandatory; where the rule operates, it leaves no room for district court discretion. See Delta, 450 U.S. at 355-56, 101 S.Ct. at 1151-52, 67 L.Ed.2d at 294-95; see id. at 369, 101 S.Ct. at 1158, 69 L.Ed.2d at 303 (Rehnquist, J., dissenting).
Having made a Rule 68 offer identical to the judgment ultimately entered, the state is entitled to the costs...
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