Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_00-cv-00779/USCOURTS-caed-2_00-cv-00779-1/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Civil Rights Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

WINTERTHUR INTERNATIONAL

AMERICA INSURANCE COMPANY,

WINTERTHUR INTERNATIONAL

AMERICA UNDERWRITERS INSURANCE

COMPANY, GENERAL CASUALTY

COMPANY OF WISCONSIN, REGENT

INSURANCE COMPANY, SOUTHERN

INSURANCE COMPANY, UNIGARD

INDEMNITY COMPANY, UNIGARD

INSURANCE COMPANY, and BLUE

RIDGE INSURANCE COMPANY,

CASE NO. CIV. S-00-0779 WBS JFM

Consolidated Cases:

NO. CIV. S-00-0506 WBS JFM

NO. CIV. S-00-0613 WBS JFM

 NO. CIV. S-00-0875 WBS JFM

Plaintiffs,

v. MEMORANDUM AND ORDER RE: RULE 

60(b)(5) MOTION FOR RELIEF 

FROM ATTORNEYS’ FEES 

JOHN GARAMENDI, in his

capacity as INSURANCE

COMMISSIONER for THE STATE OF

CALIFORNIA,

Defendant.

----oo0oo----

///

///

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I. Factual and Procedural Background

Although the content of the underlying matter is not

particularly relevant to the instant motion, the procedural

history of this case, which has traveled the road to the Supreme

Court and back again more than once, is important. 

On June 9, 2000, this court issued a preliminary

injunction after ruling that plaintiffs had established the

likelihood of irreparable harm and a probability of success on

the merits of their claims that the California Holocaust Victim

Insurance Relief Act (“HVIRA”) violates the Commerce Clause and

the foreign affairs power. Gerling Global Reinsurance Corp. of

Am. v. Quackenbush, Nos. CIV. S-00-0506 WBS JFM, CIV. S-00-0613

WBS JFM, CIV. S-00-0779 WBS JFM, CIV. S-00-0875 WBS JFM, 2000 WL

777978 (E.D. Cal. June 9, 2000). Defendants immediately lodged

an interlocutory appeal of that order with the Circuit.

On February 7, 2001, the Ninth Circuit held that “the

district court erred when it decided that HVIRA violates the

dormant Commerce Clause and the foreign affairs power.” Gerling

Global v. Low, 240 F.3d 739, 754 (9th Cir. 2001). The Ninth

Circuit, however, left the preliminary injunction in place and

remanded the matter to this court to address whether HVIRA

violates the Due Process Clause. Id. 

On October 2, 2001, this court granted plaintiffs’

motion for summary judgment, holding that HVIRA violated the Due

Process Clause, and permanently enjoined defendant from enforcing

HVIRA. Gerling Global v. Low, 186 F. Supp. 2d 1099 (E.D. Cal.

2001). On October 16, 2001, defendant appealed the grant of

summary judgment to the Ninth Circuit. During the pendency of

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this appeal, plaintiffs moved this court for an award of

attorneys’ fees pursuant to 42 U.S.C. § 1988. On January 14,

2002, this court denied that motion. 

On September 9, 2002, the Ninth Circuit reversed this

court’s order of October 2, 2001, holding, inter alia, that HVIRA

does not violate the Due Process Clause, the Commerce Clause, or

the foreign affairs power. Gerling Global v. Low, 296 F.3d 832

(9th Cir. 2002). The Ninth Circuit did not address the merits of

this court’s January 14, 2002 attorneys’ fees ruling. Instead,

the Ninth Circuit stated: “[T]he district court improperly

concluded that HVIRA was unconstitutional, it also erred in

concluding that Plaintiffs were ‘prevailing parties’ for the

purposes of 42 U.S.C. § 1988. They are not entitled to fees.” 

Id. at 851.

On June 23, 2003, the Supreme Court reversed the Ninth

Circuit, holding that HVIRA was preempted by the foreign affairs

power. Am. Ins. Ass’n v. Garamendi, 539 U.S. 396, 413 n.7

(2003). Subsequently, plaintiffs moved the Ninth Circuit for

supplemental briefing and oral argument on the issue of

attorneys’ fees. On September 9, 2003, the Ninth Circuit denied

plaintiffs’ motion and ordered that “[t]he issue of attorney fees

[be] transferred to the district court for briefing and

reconsideration.” (Oct. 31, 2003 Joint Status Conference Report,

Ex. A (Gerling Global v. Garamendi, Nos. 01-17023, 01-17433, 02-

15282 (9th Cir. Sept. 9, 2003))). 

Upon reconsideration, and in light of the Supreme

Court’s decision not to address whether HVIRA violated the

Commerce Clause or the Due Process Clause, this court denied

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 This litigation resulted from the consolidation of several 1

complaints filed by various insurance companies, challenging the

validity of HVIRA. (Oct. 16, 2000 Order.)

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plaintiffs’ motion for attorneys’ fees. (Jan. 29, 2004 Order at

5.) Plaintiffs’ only claims capable of supporting fees were

their § 1983 claims, which were founded on alleged violations of

the Commerce and Due Process Clauses. (Id. at 6.) Because

plaintiffs ultimately prevailed only on their foreign affairs

doctrine preemption theory, the court was unable to conclude that

plaintiffs prevailed on a theory capable of supporting a § 1983

claim. (Id.)

On appeal, the Ninth Circuit disagreed with this

outcome. It held on March 10, 2005 that despite plaintiffs’

failure to prevail on a claim capable of independently supporting

a § 1983 fee award, attorneys’ fees were nonetheless appropriate. 

Gerling Global Reinsurance Corp. of Am. v. Garamendi, 400 F.3d

803, 808, 810, amended by 410 F.3d 531 (9th Cir. 2005). 

Consequently, the Ninth Circuit remanded the matter to this court

“with instructions to exercise its discretion to determine a

reasonable amount of attorney’s fees . . . .” Id. at 811. The

successful appellants on the attorney’s fees matter have not yet

made a motion for this court to act on that judgment.

Of note, plaintiffs behind this motion, Winterthur

International America Insurance Company, et al., did not join in

the appeal of the order on attorneys’ fees. Consequently, 1

plaintiffs here sought, and were granted, permission to file a

motion pursuant to Federal Rule of Civil Procedure 60(b)(5),

requesting relief from judgment. (Aug. 26, 2005 Order at 2.) 

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 The “factors” that plaintiff argues govern a district 2

court’s discretion under Rule 60(b)(5) seem to be more of a

threshold test, rather than a list of considerations for a judge

exercising his or her discretion. See Werner v. Carbo, 731 F.2d

204, 206-07 (4th Cir. 1984) (“To bring himself within Rule 60(b),

the movant must make a showing of timeliness, a meritorious

defense, a lack of unfair prejudice to the opposing party, and

exceptional circumstances.”). But see Meridian Sav. Ass’n v.

Sadler, 759 F. Supp. 336, 338 (N.D. Tex. 1990) (identifying a

similar, but more comprehensive, set of factors for a court to

consider in its discretion to grant relief pursuant to Rule

60(b): (1) that final judgments should not be lightly disturbed;

(2) that the Rule 60(b) motion is not to be used as a substitute

for appeal; (3) that the rule should be liberally construed in

order to achieve substantial justice; (4) whether the motion was

made within a reasonable time; (5) [N/A--applies to default

judgments only]; (6) whether--if the judgment was rendered after

a trial on the merits--the movant had a fair opportunity to

present his claim or defense; (7) whether there are intervening

equities that would make it inequitable to grant relief; and (8)

any other factors relevant to the justice of the judgment under

attack.” (citing Seven Elves, Inc. v. Eskenazi, 635 F.2d 396, 402

(5th Cir. 1981))). Nevertheless, assuming that all of the above

factors are relevant, for the following reasons, the court would

decline to exercise its discretion in this case. First,

plaintiffs here seek relief under Rule 60(b) as a substitute for

appeal that they consciously elected not to file. To award Rule

60(b) relief here, in the absence of exceptional circumstances,

would encourage future litigants in mutli-party litigation to sit

back and wait for other parties to work on an appeal. Second,

the appealing and non-appealing parties are not so closely

related that this result is unjust, given that their relationship

to each other arose solely from the consolidation of separately

filed cases against the Commissioner. 

5

That is the motion now before the court.

II. Discussion

Federal Rule of Civil Procedure 60(b)(5) permits a

district court, in its discretion, to “relieve a party or a 2

party’s legal representative from a final judgment, order, or

proceeding” when (1) “the judgment has been satisfied, released,

or discharged,” or (2) “a prior judgment upon which it is based

has been reversed or otherwise vacated,” or (3) “it is no longer

equitable that the judgment should have prospective application .

. . .” Fed. R. Civ. P. 60(b)(5); see also United States v.

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Washington, 394 F.3d 1152, 1157 (9th Cir. 2005) (“We review the

denial of a Rule 60(b) motion for an abuse of discretion.”). 

Parties that come within the provisions of this rule can be

excused from failing to appeal an unfavorable judgment. Ackerman

v. United States, 340 U.S. 193, 198 (1950). However, “Rule 60(b)

was not intended to provide relief for error on the part of the

court or to afford a substitute for appeal.” Title v. United

States, 263 F.3d 28, 31 (9th Cir. 1959) (citing, inter alia,

Ackerman, 340 U.S. at 202).

Although Rule 60(b)(5) has three subparts, plaintiffs

only argue for relief based on one theory: a prior judgment upon

which the denial of attorneys’ fees was based has been reversed

or otherwise vacated. (Pl.’s Mot. for Relief from Order re

Attorneys’ Fees at 1.) They contend that under this rule, “a

non-appealing party may be relieved from a judgment or order if a

co-party in the same proceeding appeals and obtains a reversal of

a simultaneous adverse judgment.” (Id.) Plaintiff’s

interpretation of 60(b)(5) contradicts the plain language of the

rule and conflicts with other legal principles. 

By its terms, Rule 60(b)(5) permits relief only when a

prior judgment on which the challenged decision was based has

been overturned, and the rule’s proper application is exemplified

by California Medical Association v. Shalala, 207 F.3d 575 (9th

Cir. 2000). In Shalala, the Director of the California

Department of Health sought restitution of fees paid pursuant to

a judgment that was later reversed on appeal. Id. at 576. 

Although the defendant appealed only the liability judgment and

not the fee award, the court held that relief from the fee award

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 Defendants noted at oral argument that joining in the 3

appeal would not necessarily have been cost-less. Had the Ninth

Circuit upheld this court’s denial of attorneys’ fees, the

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under Rule 60(b)(5) was appropriate where “reversal of the merits

[on which the fee award was based] removes the underpinnings of

the fee award.” Id. at 577-78.

Thus, “Rule 60(b)(5) is available if a party seeks

relief solely on the ground that the underlying merits judgment

[has been] reversed.” Id. at 577. In contrast , “a party must

file an appeal . . . when it challenges some aspect of the fee

award itself.” Id. (discussing dicta from Mother Goose Nursery

Schs., Inc. v. Sendak, 770 F.2d 668, 676 (7th Cir. 1985)). Here,

plaintiffs seek to challenge the fee award itself. The award was

successfully appealed only by other parties, who secured a

decision from the Ninth Circuit holding that this court erred

when it denied fees in the first instance. Rule 60(b)(5) does

not support relief under these circumstances. Title, 263 F.3d at

31 (“Rule 60(b) was not intended to provide relief for error on

the part of the court . . . .”). Again, the appropriate vehicle

for relief here was an appeal, which plaintiffs failed to

perfect.

Plaintiffs have offered no explanation to dispel the

court’s belief that the decision not to appeal was nothing more

than a calculated risk, made as part of a tactical decision by

sophisticated litigants. On repeated prodding from the court,

they failed to explain why they did not appeal, especially when,

because there was no cost sharing agreement between plaintiffs,

joining the appeal would have been a near costless endeavor.3

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appealing parties would have been responsible for the costs of

the appeal. By not joining in the appeal, plaintiffs avoided

this potential liability. 

 Plaintiffs would have the court read Moitie very narrowly 4

to apply only to cases where non-appealing parties seek to relitigate claims, based on a reversal of those same claims when

appealed by other parties to the suit. However, plaintiffs’

proposal runs counter “to the general rule that when less than

all the co-defendants appeal from an adverse judgment, the

non-appealing co-defendants cannot benefit from an appellate

decision reversing the judgment.” Abatti, 859 F.2d at 119.

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They also failed to convince the court that when they sent word

that they had no plans to even pursue an outstanding cost

recovery action, they were not abandoning the litigation. 

(Def.’s Opp’n to Pls.’ 60(5)(b) Mot. Ex. A (regarding plaintiffs’

intent not to pursue the Bill of Costs filed against Commissioner

in the amount of $7,744.94 in October 2001).) From plaintiffs’

actions, the court can only conclude that they simply gave up and

threw in the towel. Now that others have tasted success, they

want back in the game.

Plaintiffs appear to believe that their “interwoven

interest” with the appealing plaintiffs distinguishes their case

and sets them apart from every other litigant who is required to

appeal in order to enjoy the benefits bestowed by a change in the

courts’ understanding of the law. However, the Supreme Court and

the Ninth Circuit have disapproved of actions brought in pursuit

of windfall benefits resulting from “appellate reversal procured

by other independent parties.” Federated Dep’t Stores v. Moitie,

452 U.S. 394, 400 (1981); Abatti v. Comm’r, 859 F.2d 115, 119

(9th Cir. 1988) (recognizing this rule). Plaintiffs’ 4

relationship to the non-appealing parties in this consolidated

case did not relieve them of the responsibility to individually

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appeal this court’s denial of their motion for attorneys’ fees. 

See In re Fine Paper Antitrust Litig., 840 F.2d 188, 194-95 (3d

Cir. 1988) (holding that, in a multi-party action where some of

the parties appealed and others did not, the first five of the

six grounds for a Rule 60(b) motion do not apply). 

Moreover, the interests of the non-appealing parties

regarding attorneys’ fees are not, as they claim, dependent on

and inseparable from the interests of the appealing parties. The

only joint interest plaintiffs here shared was in a legal

determination regarding whether attorneys’ fees could be awarded

under 42 U.S.C. § 1988 when a party prevails on a theory that

does not necessarily support § 1983 liability. The appealing

plaintiffs had this question resolved in their favor and the nonappealing plaintiffs did not. Again, the circumstances here do

not support relief under Rule 60(b)(5). Cruickshank & Co. v.

Dutchess Shipping Co., 805 F.2d 465, 468 (2d Cir. 1986)

(rejecting the questionable “interwoven and dependent” interest

basis for Rule 60(b) relief when one party appealed a damages

award and others did not); see also Moitie, 452 U.S. at 400

(“[N]o general equitable doctrine . . . countenances an exception

to the finality of a party’s failure to appeal merely because his

rights are ‘closely interwoven’ with those of another party.”).

III. Conclusion

Addressing a motion for relief under Rule 60(b)(6), the

Supreme Court noted that when a party chooses not to appeal, he 

takes “a risk, but [one that is] calculated and deliberate and

such as follows a free choice. [He] cannot be relieved of such a

choice because hindsight seems to indicate to him that his

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decision not to appeal was probably wrong . . . .” Ackermann,

340 U.S. at 198. Similarly, plaintiffs here made the decision

not to appeal and Rule 60(b)(5) cannot save them from that

miscalculation.

IT IS THEREFORE ORDERED that plaintiffs’ Rule 60(b)(5)

motion for relief from judgment be, and the same hereby is,

DENIED. 

DATED: December 14, 2005

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