United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 95-3666

___________ Anne C. Trostel; Harry A. Holman, * Jr.; H. L. Van Metre; Charles H. * Van Metre; Dorothy Hurley; * Terrance M. Hurley, Cmdr.; Carol * Sabey, Mrs.; *

Plaintiffs - * Appellants * Norwest Bank Fort Collins, N.A. *

Trustee - Appellant * District Court for the Southern

v. * American Life & Casualty * Insurance Company; * * Defendant - Appellee * Hawkeye Bank of Des Moines *

Movant * *

*

* Appeal from the United States

* District of Iowa.

*

*

*

*

___________ Submitted: November 18, 1997 Filed: January 15, 1998

___________ Before BOWMAN, BEAM, and MURPHY, Circuit Judges.

## -2- ___________ MURPHY, Circuit Judge. This case involving a gold clause in a real estate lease comes before us on remand from the Supreme Court for further consideration in light of Congre ssional action subsequent to our decision of August 14, 1996

. Trostel v. American Life & Cas. Ins. Co. , 92 F.3d 736 (8th Cir. 1996) , vacated , 117 S.Ct. 93 9 (1997). We were asked to consider the impact of a statuto ryamendment which went into effect on September 30, 1996, bu t before oral argument Congress acted again to eliminate the language added in 1996. The parties have now briefed and argued their conflicting views about the possible impact of these legislative c hanges on this litigation.

The real estate lease covers a commercial building in downtown De s Moines, Iowa. It was originally entered into in 1917 to run for ninet y nine years. The annual rent for the final forty five years was set a t $18,000, and the lessor was given the option to demand payment in gold coi n as a prot ection against future inflation. See Trostel , 92 F.3d at 738

. During the lease period public policy changed inregard to gold. Congress decla red in 1933 that gold clauses were against public policy and wer e therefore dischargeable dollar for dollar in United States currency. Join t Resolution of June 5, 1933, 48 Stat. 112, 113 (1 933) (formerly codified at 31 U.S. C. § 463) (codified as amended at 31 U.S.C. § 5118(d)(2)). Mor e than forty years later the policy changed once m ore. On October 28, 1977, Congress amended the underlying statute to make gold clauses enforceable again if they were part of an obligation issued after October 27, 1977

. Act of October 28, 1977, Pub. L. No. 95-147, § 4(c), 91 Stat. 1227, 1229 (codified as amended at 31 U.S.C. § 5118(d)(2)).
The le ase was ultimately assigned in 1990 to American Life an d Casual tyInsurance Company (American Life), and in 1993 the lessor s deman ded payment of the rental obligation in gold coin. American Lif e refused, and the lessors sought a

## The amendment also provided that it would not apply to gold clause obligations 1 

## finally adjudicated before its passage. -3- declaratoryjudgment to enforce their demand. The district court granted summary judgment t o American Life. We reversed after determining that the gold clause was enforceable under the 1977 statutory amendment because in the 1990 assignment American Life had assumed all obligations of th e original lease. Trostel , 92 F.3d at 740-41.
Shortl y thereafter Congress amended the underlying statute by adding a provision to the otherwise unrelated Economic Growth and Regulator y Paperwork Reduction Act of 1996. With the new amendment the statute read in pertinent part:

Anobligation issued containing a gold clause or governed by a gold c lause is discharged on payment (dollar for dollar) i n United States coin or currency that is legal tender at the time of paym ent. This paragraph does not apply to an obligatio n iss ued after October 27, 1977. This paragraph shall apply t o any obligation issued on or before October 27, 1977 , notwi thstandingany assignment or novation of such obligatio n after October 27, 197 7, unless all parties to the assignment or novation specifically agree to include a gold clause in the new agreement. 31 U.S.C. § 5118(d)(2) (1996 amendment highlighted). 1

The Supr eme Court then granted certiorari and remanded the case t o this court “for further consideration in light of the Economic Growth and RegulatoryPaperwork Reduction Act of 1996, P.L. No. 104-208, Sec. 2609.” 117 S.C t. 939 (1997). A briefing schedule was established, stayed a t request of both sides to permit discussions of possible settlement, and then reinsta ted with modified dates. Before oral argument could be heard , Congress acted again. This time it eliminated the provision it had

## The p arties have sought permission to file post-argument briefs addressin g 2 

## retroactivity issues, and their motions are granted. -4- added to the gold clause statute in 1996. Public Law 105-61, § 641. The legislation, signed into law on October 10, 1997, stated that:
[s]ection 5118(d)(2) of title 31 United States Code, is amended by striking “This par agraph shall” and all that follows through the end of the paragraph.
Oral ar gument was then postponed to permit additional briefing on th e implications of the new legislative action. 2

The parties disagree as to the significance of the amendments

. American Life asse rts that the gold clause in the lease cannot be enforced because the 1996 amendment was written to be retroactive and the parties did not “specifically agree” to include the gold clause in the 1990 assignment. It therefore is on ly obligated to pay the lease amount of $18,000 per year on the building. It says the 1997 amendment has no effect here because it is not retroactive, citing Landgraf v. U.S.I. Film Products , 114 S.Ct. 1483 (1994). The lesso rs argue that the gold clause in this lease continues to have effect under either statute. They contend that the 1997 amendment is retroactive, makin g the 1996 amendment now irrelevant. They also say that evenif the 1996 amendment applies to this lease, the gold clause i s enforceable because American Life explicitly agreed in the assignment to be bound by “all of the terms and conditions” of the 1917 lease, and one of the terms of that lease was the gold clause.
American Life argues that the resolution of this case is a simpl e matter of applying the Landgraf holding which requires a clear expression of Congressional i ntent before a statute will be given retroactive effect. It is unable to cite a case, however,

## The statutory background in Landgraf was strikingly different from the one here. 3 

## The statutory provisions at issue there were part of fundamental changes in civil rights law and resulted from a lengthy deliberative process. See id. at 1491, 1493. After Congress considered and rejected a version of the Civil Rights Act which had express retroactive language, it ultimately enacted a statute with none. See id. at 1491-92. Initiati ves by the parties in respect to the legislation were discussed at oral 4 

## argument. The 1997 repeal was a small part of a voluminous act entitled “Treasury, Postal 5 

## Service and General Government Appropriations, 1998.” -5- where the presumption was employedin a situation similar to the one here. 3 The 1996 amendment says that it “shall apply to any obligation issued on or before October 27, 1977 . . .,” thus indicating on its face a retroactive intent. See Landgraf , 114 S.Ct. 1483. The 1997 enactment simply state s that the prior amendment is stricken. It doe s not use the type of language normally associated with retroactive effect. See id. Its apparent intent, however, is to eliminate the effect of the previous year’s enactment, and to apply it in that way here would not implicate the policy interest s und erlying the presumption against retroactivity. This policy “ha s consistently been explained by reference to the unfairness of imposing new burdens on persons after the fact.” Id. at 1500. As to the parties in this case, the interests of “fair notice, reasonable reliance and settle d expectations,” id. at 1499, would weigh in favor of interpreting the 1997 amendment to return the law to its former state as it existed in 1990 at the time of the assignment to American Life.
The sequence of the legislative amendments and the involvement o f these p arties in that process are part of the full context of this case. 4 Eac hamendment reflected a desire to influence its outcome, and each wa s passed as a small item in an otherwise unrelated statute. The 199 7 5 amendm ent provided for the elimination of the entire 1996 amendment, an d th ere is nothing to suggest that the language was carefully crafted t o prevent its application here.

## -6- If a requirement of explicit statutory language commandin g retroactivity is necessary for the 1997 amendment to have an effect on this case, however, then we must consider the effect of the 1996 amendment a s controlling. The 1996 amendment required that a gold clause be specific ally agreed to in order to be effective. The 1990 Warranty Assignment an d Assumption agreement which controlled the assignment of the lease t o American Life cont ains a reference to the original lease and provides that the assignor transfers the leasehold interest and that American Life, the assignee:
hereby accepts, assumes and agrees to be bound by a ll

of the terms and conditions to be kept, observed, a nd performed by the lessee in said lease, as amende d above described, from and after August 1, 1990. . .

. We previously held that this assi gnment amounted to a novation. This meant th at the gold clause was enforceable under the 1977 statute sinc e under Iowa law the 1990 novation amounted to a new obligation issued after the key statutory date. See Klipp v. Iowa Grain Indemnity Fund Board , 502 N.W.2d 9, 11 (Iowa 1993); Eitzen’s Estate v. Lauman , 3 N.W.2d 546, 549-50 (Io wa 1942). Under the 1996 amendment a gold clause is not enforceabl e “notwithstanding any assignment or novation” of a contract including suc h a clause unless the parties “specifically agr ee to include a gold clause in the new agreement.” 31 U.S.C. § 5118(d)(2). The substituted contract must therefore demonstrate explicit intent to include a gold clause in the new obligation or it is not enforceable.
The substituted contract in this case satisfies the 1996 statutor y requirement because it specifically included each clause of the origina l contract as a new term. American Life expressly assumed “ all of the terms and conditions” (e mphasis added) of the 1917 contract, and the gold clause in that contract was enforceable under the statute as it existed at the time of the 1990 assignment and as amended in 1996. Under

## This resolution makes it unnecessary to consider the lessors’ arguments that the 6 

## 1996 amendment is beyond the power of Congress under the Commerce Clause or that the lease is commercially impracticable or voidable because of a failure of a fundamental condition. -7- Iowa law an assignment is a contract subject to the traditional rules o f construction and where unambiguous, its words will be interpreted according to their common meaning. Broyles v. Iowa Dep’t of Soc. Services , 305 N. W.2d 718, 721-22 (Iowa 1981) (citing 6A C.J.S. Ass ignments § 2 (1975); Kinney v. Capitol-Strauss, Inc. , 207 N.W.2d 574, 576-77 (Iowa 1973)). The terms of this assignment reveal the parties’ intent to agree to include all original lease clauses, including the gold clause, in the new agreement created in 1990, thus satisfying the requirements of the 1996 amendment.
American Life claims that even if it specifically agreed to includ e the gold clause, the lessors did not. The statutory requirement is no t satisfied unless “ all parties” to the contract have agreed. American Life argues the lessors did not even realize that they could demand payment u nder the gold cla use until 1991. The original lessor agreed in 1917 to al l future assignments of the lease, however, and thus there was no need fo r them to agree to t he gold clause contemporaneously with the 1990 novation. The statute only r equires that all parties specifically agree to include a gold c lause, not that all parties contemporaneously agree to include th e clause. The original lessor specifically agr eed to all clauses in the 1917 lease, including the gold clause, as well as to all future assignments, and lessors are the su ccessors in interest. This is sufficient to satisfy the specific agreement requirement.
After reviewing the pertinent legislation subsequent to our earlie r decision and the arguments raised by the part ies, we conclude that the gold cla use in this lease is enforceable and we reinstate our prior decision

. Accor dingly, we remand the case to the district court for furthe r proceedings consistent with this opinion and Trostel v. American Life & Cas. Ins. Co. , 92 F.3d 736 (8th Cir. 1996). 6

## -8- A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT