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. e du/thir dc ir c uit_2002/88Filed February 1, 2002

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 00-2458

COLTEC INDUSTRIES, INC., a Pennsylvania Corporation ; FOUR LEAF COAL COMPANY, INC., a Tennessee Corporation; L.G. WASSON COAL MINING CORP., an Indiana Corporation, Appellants

v.

WILLIAM P. HOBGOOD; MICHAEL H. HOLLAND; MARTY HUDSON; THOMAS O.S. RAND; ELLIOT A. SEGAL; CARLTON R. SICKLES; GAIL R. WILENSKY, as TRUSTEES

OF THE UNITED MINE WORKERS OF AMERICA COMBINED FUND; UNITED MINE WORKERS OF AMERICA COMBINED BENEFIT TRUST;

UNITED STATES OF AMERICA (Intervenor in D.C.)

On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil No. 93-cv-01955) District Judge: Hon. D. Brooks Smith, Chief JudgeNo. 00-4385

COLTEC INDUSTRIES, INC., a Pennsylvania Corporation ; FOUR LEAF COAL COMPANY, INC., a Tennessee Corporation; L.G. WASSON COAL MINING CORP., an Indiana Corporation

v.

WILLIAM P. HOBGOOD; MICHAEL H. HOLLAND; MARTY HUDSON; THOMAS O.S. RAND; ELLIOT A. SEGAL;
CARLTON R. SICKLES; GAIL R. WILENSKY, as TRUSTEES

OF THE UNITED MINE WORKERS OF AMERICA COMBINED FIND; UNITED MINE WORKERS OF AMERICA COMBINED BENEFIT FUND;

UNITED STATES OF AMERICA (Intervenor in D.C.)

Coltec Industries, Inc., Appellant

On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil No. 93-cv-01955) District Judge: Hon. D. Brooks Smith, Chief Judge

Argued September 19, 2001

Before: SLOVITER, NYGAARD and McKEE, Circuit Judge s

(Filed February 1, 2002)

2George E. McGrann (Argued)

Schnader, Harrison, Segal & Lewis Pittsburgh, PA 15222

William H. Powderly, III Metz, Schermer & Lewis Pittsburgh, PA 15222

Attorneys for Appellant Coltec Industries, Inc.

Peter Buscemi (Argued) Morgan, Lewis & Bockius Washington, D.C. 20036

Attorney for Appellees William P. Hobgood, Michael H. Holland, Marty D. Hudson, Thomas O.S. Rand, Elliot A. Segal, Carlton R. Sickles, and Gail R. Wilensky, as Trustees of the United Mine Workers of America,

United Mine Workers of America

Combined Benefit Fund

Mark B. Stern Jonathan H. Levy (Argued) United States Department of Justice Civil Division, Appellate Staff Washington, D.C. 20530

Attorneys for Appellee

United States

OPINION OF THE COURT

SLOVITER, Circuit Judge:

In this appeal, Coltec Industries, Inc. ("Coltec") seeks to extricate itself from its voluntary dismissal with prejudice of its claim against the United Mine Workers of Americ a Combined Benefit Fund and its trustees (collectivel y"the Fund") that asserted that the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act), 26 U.S.C. SS 9701-9 722

3(2001), was unconstitutional. Subsequent to that di smissal,

the Supreme Court in Eastern Enterprises v. Apfel, 524 U.S. 498 (1997), declared the Coal Act unconstitutional as applied to companies in situations similar to Colte c. Coltec

then filed motions in the District Court under Fede ral Rule of Civil Procedure 60(b) seeking to reinstate its

constitutional claims. The District Court viewed Co ltec as seeking to escape the effects of its earlier agreem ents in order to benefit from the ruling in Eastern and den ied Coltec's attempt to reassert its constitutional cla ims or to have its liability for Coal Act premiums reduced to zero. The District Court also ordered Coltec to pay to the Fu nd $7,129,090.97 in premiums and interest. Coltec appe als the rulings of the District Court.

I.

BACKGROUND

Congress enacted the Coal Act to resolve the immine nt insolvency of multi-employer trusts created by coal industry agreements to provide health benefits for coal miners and their dependents. The background of the Coal Act is thoroughly reviewed in Eastern Enterprises v . Apfel, 524 U.S. 498, 504-14 (1997), and thereafter in Unit y Real Estate Co. v. Hudson, 178 F.3d 649, 653-54 (3d Cir. 1999),

and in Blue Diamond Coal Co. v. Trustees of the UMW A Combined Benefit Fund, 249 F.3d 519, 521-22 (6th Ci r. 2001). We thus summarize only the particular provis ions

and facts relevant to the case before us.

The Coal Act merged existing trusts into the appell ee United Mine Workers of America Combined Benefit Fun d and charged the Fund's trustees with collecting pre miums from the former employers of eligible retirees and using those premiums to pay the retirees' benefits. Under the Act, the Commissioner of Social Security assigns retiree s to their former employers, and the Fund charges premiu ms based on these assignments.

Coltec was assigned 249 retirees as of February 1, 1993, and the Fund assessed premiums against the company, which made its first two monthly payments (totaling

4$139,496.36), under protest.1 App. at 232. That Nov ember,

Coltec and two other companies, Four Leaf Coal Co. and L.G. Wasson Coal Mining Corp., sued the Fund seekin g declaratory and injunctive relief (including a contemporaneous motion for a temporary restraining order) from further assessments of Coal Act premiums again st them. App. at 19-42. The first four counts of the c omplaint claimed that the Act was unconstitutional as applie d to them under the Fifth Amendment's takings and due process clauses because the plaintiff companies had not signed the relevant agreements. They later added a fifth count alleging errors in the assignments of benefic iaries to

them.

In December 1993, the parties executed an agreement (the "Agreement"), App. at 236-37, under which the plaintiffs agreed to withdraw their request for a t emporary restraining order. Coltec agreed to establish an es crow account into which it would deposit all premiums du e during the pendency of its preliminary injunction m otion. The terms were established in a contemporaneous sep arate written agreement (the "Escrow Agreement"). App. at 232- 35. In return, the Fund agreed to deem Coltec's pay ments into escrow as payments to the Fund and not to trea t the other plaintiffs' failure to pay as a default.2 The Agreement provided that the escrow funds, plus interest, woul d be disbursed to the Fund if the injunction motion was denied or to Coltec if it was granted.

In January 1994, the Fund answered the complaint an d counterclaimed, seeking, inter alia, a declaration that the Coal Act was constitutional. Later that month, the United

States intervened to defend the Act's constitutiona lity. In

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1. Coltec paid under protest on the ground that the Coal Act was unconstitutional as applied to it because it did no t participate in the negotiations for the 1974 or any subsequent Nationa l Bituminous Coal Wage Agreements and did not in any other way agree to make contributions under these agreements. App. at 24.

2. Although the complaint was filed by all three co al companies as plaintiffs, and they all entered into the Agreement (but not the Escrow Agreement), depending on the context we will refer only to Coltec as its claims are the only ones at issue in this appeal.

5May 1996, Coltec and the other two plaintiffs withd rew

their preliminary injunction motion, and the Distri ct Court dismissed that motion. App. at 126.

Meanwhile, several courts of appeals, including thi s one, held that the Coal Act was constitutional as applie d to coal operators similarly situated to Coltec. See Eastern Enterprises v. Chater, 110 F.3d 150 (1st Cir. 1997) ; Holland v. Keenan Trucking Co., 102 F.3d 736 (4th Cir. 1996 ); Carbon Fuel Co. v. USX Corp., 100 F.3d 1124 (4th Ci r. 1996); Lindsey Coal Mining Co. v. Chater, 90 F.3d 6 88 (3d Cir. 1996); Blue Diamond Coal Co. v. Shalala (In re Blue Diamond Coal Co.), 79 F.3d 516 (6th Cir. 1996); Dav on, Inc. v. Shalala, 75 F.3d 1114 (7th Cir. 1996); LTV Steel Co. v. Shalala (In re Chateaugay Corp.), 53 F.3d 478 (2d C ir. 1995). The Supreme Court had denied certiorari in B lue Diamond, 519 U.S. 516 (1997), Davon, 519 U.S. 808 ( 1996), and Chateaugay, 516 U.S. 913 (1995). Constitutional challenges by other coal companies were still pendi ng when the plaintiff companies initiated settlement negoti ations with the Fund. See, e.g., Eastern Enterprises, 110 F.3d 150, rev'd, 524 U.S. 498 (1998); Mary Helen Coal Corp. v

. Hudson, 976 F. Supp. 366 (E.D. Va. 1997), rev'd, 16 4 F.3d 624 (4th Cir. 1998).

On June 30, 1997, prior to the resolution of the pe nding constitutional challenges in other cases, the parti es in this case signed a stipulation (the "Stipulation") which referenced a decision by the Alabama federal court that resolved a dispute as to the amount of premiums to be

assessed under the Coal Act. That decision was affi rmed by

the Eleventh Circuit. National Coal Ass'n v. Chater , No. CV94-H-780-S, 1995 WL 1052240 (N.D. Ala.), aff'd, 8 1 F.3d 1077 (11th Cir. 1996) ("NCA"). The Stipulation also referenced the then-pending follow-up case, Nationa l Mining Ass'n v. Chater, No. CV-96-N-1385-S (N.D. Ala. 1996 ) ("NMA"), in which coal companies sought a refund of the differential between the amount they had paid over a period of several years and the amount they would have pai d under the NCA formula (the "premium differential"). The Stipulation stated:

plaintiffs seek either to obtain the benefit s of the NMA litigation, should the outcome be favorable to the

6plaintiffs in that action, or to retain the right to litigate

the issue themselves should the outcome of t he NMA litigation be unfavorable to the plaintiffs in that case.

App. at 128.

Specifically, the Stipulation provided that: (1) pl aintiffs would amend their complaint to state a new claim se eking the premium differential, (2) defendants would not oppose this amendment, (3) plaintiffs would dismiss with p rejudice their five existing claims, (4) the parties would a sk the court to stay the premium differential claim pending reso lution of the NMA litigation, and (5) upon a final judgment i n NMA:

a) if the said final judgment . . . is favor able to plaintiffs in that case, then [the Fund] wil l afford plaintiffs in this case the same treatment o f [its] new claim . . . as is afforded to the plaintiffs in the NMA litigation; and b) if the said final judgmen t . . . is favorable to defendants in that case, the st ay imposed

on the new claim for relief . . . will be li fted, and plaintiffs will be free to pursue that claim . . . and [the Fund] will be free to defend . . . against t hat claim.

App. at 129-30. In other words, the plaintiff compa nies would get the benefit of any decision determining t hat their premiums should have been lower but could litigate that point if the Alabama court found otherwise. Pursuan t to the Stipulation, the plaintiff companies amended their complaint to include a new sixth count that concern ed the premium differential issue, App. at 132-38, 147-53, and dismissed the first five counts with prejudice. The District Court "so ordered" the Stipulation on July 2, 1997. The District Court then granted the parties' joint moti on to stay this case pending the resolution of NMA.

On October 20, 1997, the Supreme Court granted certiorari from the decision of the Court of Appeal s for the First Circuit holding the Coal Act constitutional. Eastern Enterprises v. Apfel, 522 U.S. 931 (1997) (granting writ of certiorari). On June 25, 1998, the Court found the Coal Act unconstitutional as applied to companies which had not signed relevant coal-industry agreements. Eastern, 524 U.S. 498 (1998). The decision in Eastern was"splintered. " Unity Real Estate Co., 178 F.3d at 658. Five Justices fou nd the

7Act unconstitutional as applied to companies who, l ike

Eastern and Coltec, had not signed the relevant coa lindustry agreements. Only four of those Justices be lieved that, applied to such companies, the Act was an unconstitutional taking, Eastern, 524 U.S. at 529-3 7 (plurality opinion), while the fifth believed the A ct violated due process but was not a taking, id. at 539-50 (Ke nnedy, J., concurring and dissenting). The other four Just ices

would have held that the Coal Act was constitutiona l as applied to such companies. Id. at 550-53 (Stevens, J., dissenting); id. at 553-68 (Breyer, J., dissenting)

.

Shortly after Eastern was decided, the plaintiff co mpanies in this case filed three motions in an attempt to a void Coal Act liability. The first motion requested leave to file a new complaint restating the dismissed constitutional cl aims and altering the sixth count to claim zero premium liab ility. The

second asked for relief under Federal Rule of Civil Procedure 60(b)(5) or (6) from the dismissal of the first five counts of the complaint which challenged the constitutionality of the Coal Act. The third motion sought to lift the stay of count six (the premium differentia l). App. at 155-87. On November 9, 1998, while the motions were pending, the Social Security Administration wrote t o Coltec voiding Coltec's assignments in light of Eastern ( the "SSA letter"). App. at 201.

The District Court denied the three motions on Janu ary 25, 1999. App. at 188-95. The District Court held t hat the Eastern decision did not provide a basis for reliev ing Coltec of the consequences of its bargain. The court also denied Coltec's subsequent motion for "limited reconsidera tion" based on the SSA letter, finding that the letter, w hich Coltec received before the January order, was not n ew evidence, and that Coltec's reliance on the letter was merely another attempt to reassert the claims it had barga ined away. App. at 204.

In May 1999, the NMA parties reached a settlement w ith the Fund under which the Fund agreed to pay back th e premium differential without interest. Supp. App. a t 388- 93. The Fund, which had agreed in the Stipulation t o give Coltec the benefit of NMA if the coal companies wer e successful in that litigation, offered to offset Co ltec's

8premium differential against Coltec's release of th e escrow

money, but Coltec denied any liability. Supp. App. at 394- 95, 400-03. The Fund then filed a motion asking the

District Court to order disbursement of the funds t hat were believed to be in escrow, App. at 219-20, at which time

Coltec first revealed that it had not in fact estab lished an escrow account as it had represented. App. at 287-8 8. The District Court granted the Fund's motion on July 20 , 2000 and ordered Coltec to pay directly to the Fund over $7 million in premiums and interest3 which should have been in escrow. App. at 297-303. Coltec timely appealed. 4

Thereafter, the District Court directed the parties to file dispositive motions.5 It ruled on those motions on December 4, 2000, issuing a final judgment dismissi ng the Fund's counterclaims as moot and granting Coltec summary judgment on its premium differential claim. App. at 370-78. Specifically, the District Court found t hat Coltec had made a bargain to forego all challenges to its underlying Coal Act premium liability in exchange f or the opportunity to (1) claim the premium differential a nd (2) gain the benefit of a favorable NMA result while (3 ) retaining the right to litigate the premium differential issu e itself should the NMA outcome be unfavorable to its positi on.

The court also reiterated its understanding of the parties' deal when it granted the Fund's motion to order disbursement of the escrow funds. It rejected Colte c's argument that the Fund had no right to premiums due to the SSA letter, treating it as another effort by Co ltec to renege on its concession of liability in the Stipul ation. In response to Coltec's argument that the Agreement re quired denial of Coltec's initial injunction motion to tri gger disbursement of the escrow to the Fund, the Distric t Court
found that Coltec's withdrawal and its dismissal of its

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3. The order allowed Coltec to offset its payment b y the amount of the premium differential (approximately $150,000).

4. We need not decide if we have jurisdiction over that appeal because it has been consolidated with Coltec's later appeal of the final judgment.

5. Around this time, Four Leaf and Wasson settled w ith the Fund, although the District Court acknowledged that nothi ng had been entered into the record regarding these settlements. App. a t 314, 371 n.2.

9injunction motion satisfied this condition. Morever , the

court held that Coltec's failure to make the agreed upon payments into escrow did not excuse its obligation to pay the amount that should have been (and was represent ed to be) in escrow.6

The District Court held that because the NMA result was undisputedly favorable to Coltec, the Stipulation l imited the relief to that afforded the NMA plaintiffs, which n ecessarily meant that count six was limited to the premium

differential and that Coltec could not use count si x as a vehicle for recalculating its premiums to zero. The court did award Coltec a $152,717.92 offset against the money it owed the Fund and stayed the judgment pending Colte c's appeal, which this court consolidated with the comp any's earlier appeal.7

II.

JURISDICTION AND STANDARD

The District Court had federal question jurisdictio n and this court has jurisdiction under 28 U.S.C. S 1291. The parties disagree as to the standard of review we sh ould apply to the District Court's treatment of the Stip ulation, with the Fund advocating a clearly erroneous standa rd and Coltec advocating a plenary standard. We note that our result in this case would be the same under either standard. This court applies plenary review to a di strict court's construction of settlement agreements, but should

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6. We note our surprise that there is no reference in the record to any sanction imposed by the District Court on Coltec or its attorney for what appears to be years of falsely representing the est ablishment and existence of an escrow fund, although the District Court did find the conduct "troubling." App. at 302 n.1.

7. On March 27, 2001, the Fund wrote to Coltec and Wasson, offering a partial refund of the premiums they had paid, pursu ant to a fund set up by Congress for partially reimbursing companies in their position in the wake of Eastern. Letter from George E. McGrann, Att orney for Coltec, to the Court (May 9, 2001) (enclosing letter from Carl F. Tennille, Comptroller for Health and Retirement Funds (March 27, 2001)) (on file in Clerk's office).

10review a district court's interpretation of settlem ent

agreements, as well as any underlying factual findi ngs, for clear error, as it would in reviewing a district co urt's treatment of any other contract. See, e.g., In re C endant Corp. Prides Litig., 233 F.3d 188, 193 (3d Cir. 200 0) ("[B]asic contract principles . . . apply to settle ment agreements [and] . . . contract interpretation is a question of fact, [thus] . . . review is according to the cl early erroneous standard. In contrast, contract construct ion, that is, the legal operation of the contract, is a quest ion of law mandating plenary review."). We review the denial o f Rule 60(b) relief for an abuse of discretion. Rolo v. Ci ty Investing Co. Liquidating Trust, 155 F.3d 644, 653 (3d Cir. 1 998).8

III.

DISCUSSION

On appeal, Coltec makes several challenges to the District Court's rulings. Primarily, however, the c ompany asserts that the District Court misinterpreted the Stipulation, abused its discretion in denying the R ule 60(b) motion, and had no basis to award money to the Fund

. Coltec seeks reversal of the $7,129,090.97 award to the

Fund and asks us to instruct the District Court to order the Fund to refund the two premiums Coltec paid, with interest. In the alternative, Coltec asks this cour t to remand for another recalculation of its premium differenti al, but it

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8. Coltec suggests review is plenary when a distric t court does not exercise its discretion, citing, inter alia, Twelve John Does v. District

of Columbia, 841 F.2d 1133, 1138 (D.C. Cir. 1988), for the proposition that a denial of Rule 60(b) relief should be reversed if it is based on an

error of law. This is consistent with the abuse of discre tion standard. See,

e.g., Stokors S.A. v. Morrison, 147 F.3d 759, 761 (8th Ci r. 1998) ("A district court necessarily abuses its discretion if it bases its decision on an erroneous view of controlling law."). Coltec also a rgues courts have no discretion to deny a Rule 60(b) motion which is bas ed on the unconstitutionality of the underlying judgment. See Boughner v. Sec'y of Health, Educ. & Welfare, 572 F.2d 976, 977 (3d Cir. 1978). The language

Coltec relies on is dictum. This court reviewed suc h a denial for abuse of discretion in Marshall v. Board of Education , 5 75 F.2d 417, 422-24 (3d Cir. 1978).

11does not respond to the Fund's assertions (1) that Coltec

waived this issue by not raising it in the District Court and (2) that the credit is correctly calculated. The Fu nd defends the District Court's understanding of the parties' agreement and, along with the United States, asserts that the court properly denied Rule 60(b) relief.9

A. Coltec's Coal Act Liability

Coltec contends that it should prevail on this appe al even without the constitutional claims it voluntarily di smissed because its Coal Act liability is zero. Coltec argu es that in light of the Stipulation the District Court abused its discretion in declining to lift the stay on count s ix and erred in holding that its resolution of that count was limited to the two options in the Stipulation.

It is manifest that Coltec explicitly agreed in the Stipulation to dismiss with prejudice its first fiv e counts, which stated constitutional challenges to the Coal Act and a statutory challenge to the company's assignments, thereby forfeiting these avenues of contesting its underlying liability. The District Court "so ordered" the Stip ulation and the related dismissal and stay orders. In exchange for Coltec's abandonment of its challenges to its liabi lity, the Fund agreed that Coltec could challenge the amount of its assessments by adding "a new claim for relief that will seek to reduce, by the amount of the premium differentia l[from NCA], the Coal Act premiums assessed against plaint iffs by [the Fund]." App. at 129. The plain language of the Stipulation thus confined the scope of this new six th count.

Coltec clearly understood this because its sixth co unt was narrowly drawn, alleging only that certain offs ets due under the Coal Act were under-calculated, resulting in the premium differential, and requesting that the court order the Fund to recalculate its pre-1996 premiums accor ding to the NCA method10 and release the premium differenti al plus interest to Coltec from the company's payments in e scrow. As contemplated by the Stipulation, the sixth count did not

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9. The United States takes no position regarding th e money judgment.

Br. of United States at 10 n.1.

10. From 1996 on, the Fund assessed all premiums ac cording to NCA.

12challenge either Coltec's assignments or its underl ying

premium liability based on these assignments.

Moreover, the Stipulation restricted the District C ourt's ultimate resolution of the sixth count. It provided that the parties would ask to stay count six pending the res olution of NMA and then, if the resolution was favorable to the NMA plaintiffs, the Fund would give Coltec the same tre atment regarding its premium differential claim as the NMA plaintiffs received.11 It also provided that if the outcome were favorable to the Fund, the stay on the sixth c ount would be lifted and the parties would be free to li tigate the premium differential issue. The District Court's st ay order recited this language. App. at 145-46. By voluntary agreement and subsequent court order, Coltec's sole remaining cause of action is confined to seeking th e premium differential which the Fund has offered Col tec. The Stipulation precludes Coltec from contesting it s underlying liability for Coal Act premiums. For thi s reason, Coltec cannot use count six to state a claim for ze ro liability or to request a refund of its two premium payments, and nothing in the SSA letter requires otherwise. Thus, the

District Court did not abuse its discretion in fail ing to lift the stay and properly denied Coltec's summary judgm ent request for relief beyond that afforded the NMA pl aintiffs.

B. Coltec's Rule 60(b) Motion

"The general purpose of Rule 60(b) . . . is to stri ke a proper balance between the conflicting principles t hat litigation must be brought to an end and that justi ce must be done." Boughner v. Sec'y of Health, Educ. & Welf are, 572 F.2d 976, 977 (3d Cir. 1978). Coltec contends that the

denial of relief in this case was an abuse of discr etion and that relief is warranted under either Rule 60(b)(5) or 60(b)(6). The relevant portions of the rule provide :

(b) On motion and upon such terms as are jus t, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: . . .

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11. On appeal, Coltec does not contest that under t he Stipulation the settlement terminating the NMA case was a resolutio n favorable to the NMA plaintiffs.

13(5) the judgment has been satisfied, releas ed, or

discharged, or a prior judgment upon which i t is based has been reversed or otherwise vacated, or i t is no longer equitable that the judgment should ha ve prospective application; or

(6) any other reason justifying relief from the operation of the judgment.

Fed. R. Civ. P. 60.12 Coltec based its motion in th e District Court for relief from the dismissal with prejudice of the first five counts of its complaint on these subsections, and now appeals the District Court's denial of this motion.

1. Subsection (5)

This court has held that "[t]he definitional limita tion in subsection (5) is significant in that it empowers a court to modify a judgment only if it is `prospective,' or e xecutory." Marshall v. Bd. of Educ, 575 F.2d 417, 425 (3d Cir. 1978). The District Court held that its dismissal with pre judice of the first five counts does not satisfy the "prospec tive" requirement of this section. Coltec argues that bec ause there was no money judgment against it at the time of its Rule 60(b) motion, an order allowing it to reassert its

constitutional claims would have resulted in a find ing that it had no Coal Act liability, which would have give n it relief from the prospective application of the Stipulation . It asserts that, therefore, the District Court's findi ng that the dismissal was not prospective was erroneous and tha t the court abused its discretion by failing to weigh the equities of the company's motion.

As an initial matter, Coltec's motion asked for rel ief from

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12. The United States argues that Coltec's Rule 60( b) motion is moot

because the motion seeks to reinstate claims challe nging the constitutionality of the Coal Act despite the fact that the government has already declared Coltec's assignments void and agre ed that further assessments against Coltec are inappropriate. Howev er, if we found the District Court abused its discretion in denying Col tec's request for Rule 60(b) relief, it could affect Coltec's right to the premium payments it made (and was supposed to put in escrow). So, while the question of the Act's constitutionality as applied to Coltec may be moot, Coltec's appeal of the denial of its Rule 60(b) motion is not.

14the dismissal order, not from the Stipulation. Cour ts have

generally held that dismissals with prejudice are n ot prospective within the meaning of Rule 60(b)(5). Se e, e.g., Maraziti v. Thorpe, 52 F.3d 252, 254 (9th Cir. 1995 ); Schwartz v. United States, 976 F.2d 213, 218 (4th C ir. 1992); Picco v. Global Marine Drilling Co., 900 F.2 d 846, 851 (5th Cir. 1990); Twelve John Does v. District of Co lumbia, 841 F.2d 1133, 1139-40 (D.C. Cir. 1988). Coltec cit es no authority to the contrary. Instead, Coltec argues t hat the prospective effect of the dismissal prevents it fro m reasserting its constitutional claims and defenses. However, as the government notes, this collateral estoppel e ffect is common to all judgments. If this were enough to sat isfy Rule 60(b)(5)'s threshold requirement, then the Rul e's requirement of "prospective application" would be meaningless.

Numerous courts have explicitly rejected this argum ent. See, e.g., Maraziti, 52 F.3d at 254 ("The construct ion . . . to the effect that a judgment has prospective effect s o long as the parties are bound by it, would read the word `prospective' out of the rule.") (quotation omitted ); Picco, 900 F.2d at 851 ("The only arguably prospective effect of the . . . dismissal is that it precludes relitigation of the issues decided, which clearly is not enough."); Gibbs v. M axwell House, 738 F.2d 1153, 1156 (11th Cir. 1984) ("That plaintiff remains bound by the dismissal is not a `prospective effect' within the meaning of rule 60( b)(5) any more than if plaintiff were continuing to feel the effects of a money judgment against him.").

Coltec asserts that the prospective effect it descr ibes is narrower than the collateral estoppel effect at iss ue in the

above cases because the dismissal in this case was executory. This differs, it contends, from the judg ment for monetary damages that had been paid and which this court determined was not prospective in Marshall, 575 F.2 d 417.13

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13. Coltec also analogizes the District Court's int erpretation of the Stipulation in this case to the judgment in United States v. Kayser-Roth Corp., 103 F. Supp. 2d 74, 79-80 (D.R.I. 2000) (jud gment prospective as to damages when it fixed liability for waste clean- up but left amount of liability dependent on future events). But, as note d above, Coltec's Rule 60(b) motion sought only to vacate the dismissal, n ot the Stipulation.

15However, although the court in Marshall sustained t he

denial of Rule 60(b) relief when the judgment had a lready been satisfied, the court explicitly noted that eve n if the judgment had not yet been satisfied, it would not q ualify as prospective under Rule 60(b)(5) because "[a]`prospe ctive' injunction envisions a restraint of future conduct, not an order to remedy past wrongs when the compensation payment is withheld from the beneficiaries until so me subsequent date." Marshall, 575 F.2d at 425 n.27.

In fact, all of the cases Coltec cites which grante d Rule 60(b)(5) relief involved injunctions or consent dec rees regulating ongoing behavior. See Agostini v. Felton , 521 U.S. 203, 212 (1997) (injunction preventing certain manner of delivering publicly funded services to parochial school students); Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367, 374-75 (1992) (consent decree mandating constr uction of new prison according to specific guidelines); Be llevue Manor Assocs. v. United States, 165 F.3d 1249, 1251 (9th Cir. 1999) (injunction mandating use of specific re ntsubsidy calculation method); Marshall, 575 F.2d 417 , 419 (injunction requiring compliance with federal wage- andhour law).

Coltec's point that judgments are prospective when they are executory is not in dispute.14 There was nothin g executory about the dismissal with prejudice of cou nts one through five. Even though there was no money judgme nt against Coltec at the time of its motion, it had pr eviously assured the District Court that it was depositing i nto the escrow account the Coal Act premiums as they were d ue. See, e.g., App. at 151 ("Plaintiffs have held under escrow certain sums assessed to them for premiums for plan years February 1, 1993, October 1, 1993, and October 1, 1 995."); App. at 170 (same); and App. at 198 ("[Coltec] has paid its

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14. The United States cites a series of cases in su pport of this proposition. See, e.g., Cincinnati Ins. Co. v. Flan ders Elec. Motor Serv., Inc., 131 F.3d 625, 630 (7th Cir. 1997) (finding ju dgment not prospective that interpreted contract and continued to affect r ights and duties of parties, and stating "[j]udgments are prospective w hen they are `executory' or `involve the supervision of changing conduct or conditions.' ") (quoting Twelve John Does , 841 F.2 d at 1138); Maraziti,

52 F.3d 252, 254 (same).

16Coal Act assessments since 1993 into an escrow acco unt

pending the resolution of the respective rights of the parties, and such monies remain in escrow. This esc row fund contains several million dollars."). It is dis ingenuous -- in light of Coltec's multiple false statements t o both the District Court and the Fund about its escrow paymen ts -- for Coltec to attempt to use its failure to make th e promised payments to its own advantage. Therefore, the Distr ict Court did not abuse its discretion in finding that the dismissal did not satisfy Rule 60(b)(5)'s threshold requirement of prospective effect.

2. Subsection (6)

Rule 60(b)(6) is a catchall provision which allows a court to relieve a party from the effects of an order for "any other reason justifying relief from the operation of the judgment." Fed. R. Civ. P. 60(b)(6). However, "[t]his court ha s consistently held that the Rule 60(b)(6) ground for relief from judgment provides for extraordinary relief and may only be invoked upon a showing of exceptional circumstances." In re Fine Paper Antitrust Litig., 840 F.2d 188 (3d Cir. 1988) (quotation omitted); see also Un ited States Steel Corp. v. Fraternal Ass'n of Steel Haul ers, 601 F.2d 1269, 1274 (3d Cir. 1979); Marshall, 575 F.3d at 425.

In rejecting Coltec's Rule 60(b)(6) motion, the Dis trict Court relied in large part on the fact that a chang e in law subsequent to the challenged order rarely justifies Rule 60(b)(6) relief. See Agostini, 521 U.S. at 239; Cin cinnati Ins. Co., 131 F.3d at 628-29; Marshall, 575 F.3d at 425- 26. In addition, as to the equities of Coltec's motion, th e District Court found the company was trying to escape the ef fects of a bargain it regretted in hindsight and held tha t there were no exceptional circumstance that would justify allowing Coltec to renege on its deal.

Coltec acknowledges that its decision voluntarily t o dismiss its constitutional claims is an equitable f actor militating against Rule 60(b)(6) relief,15 but arg ues that the

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15. Alternatively, Coltec appears to argue that the fact the court did not

consider the merits of its constitutional claims in granting the dismissal at issue militates in favor of Rule 60(b) relief, c iting Lasky v.

Continental

17District Court abused its discretion by giving dete rminative

weight to this factor. Likewise, Coltec concedes th at a change in decisional law is not alone sufficient to justify Rule 60(b) relief, but contends that the District C ourt abused its discretion by erroneously concluding tha t a change in law cannot support such relief and declin ing further to consider the equities of the company's m otion.

Coltec underscores that the new law in this case wa s a Supreme Court decision based on a finding of unconstitutionality.

In its ruling denying Rule 60(b) relief, the Distri ct Court noted that decisional law cannot alone justify such relief

and that Coltec had consented to the dismissal. See , e.g., App. at 190 ("Failing to litigate to its conclusion a matter that could have been pursued . . . all the way to t he Supreme Court does not constitute an exceptional circumstance."); App. at 193 ("[A] change in the de cisional law after judgment is entered . . . is not consider ed exceptional and does not justify relief."). However , the District Court considered other equitable factors i n the remainder of its opinion, most notably the content and context of the parties' agreement leading to the di smissal. Even if the District Court could have been more exp licit in its analysis of the equitable factors, it did not a buse its discretion, particularly since it focused on the pr incipal

issue of whether Coltec should be excused from the effects of a deal it voluntarily made.

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Products Corp., 804 F.2d 250, 256 n.10 (3d Cir. 198 6) ("[I]f relief is sought from a default judgment or a judgment of dis missal where there has been no consideration of the merits, [the court should consider] whether in the particular case the interest of deci ding cases on the merits outweighs the interest in orderly procedure and in the finality of judgments, and whether there is merit in the defens e or claim, as the case may be.") (quotation omitted).

In light of the voluminous case law mandating a hig h hurdle for Rule 60(b) relief from consensual orders, see, e.g. , Ru fo, 502 U.S. at 383, Bellevue, 165 F.3d at 1253 n.4, Phila. Welfare Righ ts Org. v. Shapp, 602 F.2d 1114, 1119-20 (3d Cir. 1979), this dictum from Lasky is better understood as applying to adjudications on procedur al grounds rather

than consensual orders like the dismissal in this c ase.

18For purposes of an equitable analysis, the dismissa l in

this case should be viewed in the context of the St ipulation which precipitated it. As the District Court noted, the parties to the Stipulation clearly knew how to prov ide for contingencies such as future case law (i.e., NMA ) and knew that there were still pending constitutional challe nges to
the Coal Act. Coltec decided not to condition the d ismissal

of its constitutional claims on the ultimate outcom e of these challenges, but deliberately forfeited its st ill viable constitutional claims, apparently because it believ ed they were unlikely to be successful in light of then-exi sting case law. It did so in exchange for valuable considerati on in the form of a chance to pursue without litigation its p remium differential claim, which it presumably believed it had a better chance of winning. In retrospect in light of the Supreme Court's decision in Eastern, Coltec may wis h that it had not made this deal, but courts have not look ed favorably on the entreaties of parties trying to es cape the consequences of their own "counseled and knowledgea ble" decisions. Fine Paper, 840 F.2d at 195.

Coltec's situation is analogous to the circumstance s of other Rule 60(b) movants whose motions courts have denied in large part because of their deliberate de cisions not to appeal unfavorable adjudications. See, e.g., id. at 188 (involving attorneys who chose not to appeal fe e award others appealed); Marshall, 575 F.2d at 420 (involv ing school board that paid judgment after appeal rather than petitioning for certiorari). The Supreme Court addr essed this situation in Ackermann v. United States, 340 U .S. 193 (1950), which involved the denaturalization of two naturalized German citizens during World War II. Fo r monetary reasons, Ackermann declined to appeal, bel ieving

the issue would be resolved after the war. When the appeal of his brother-in-law, Keilbar, was successful, Ack ermann filed for Rule 60(b) relief from his denaturalizati on. The Supreme Court held such relief was appropriately de nied, explaining:

Petitioner made a considered choice not to a ppeal, apparently because he did not feel that an a ppeal would prove to be worth what he thought was a required sacrifice of his home. His choice w as a risk,

19but calculated and deliberate and such as fo llows a

free choice. Petitioner cannot be relieved o f such a choice because hindsight seems to indicate t o him that his decision not to appeal was probably wron g, considering the outcome of the Keilbar case. There must be an end to litigation someday, and fr ee, calculated, deliberate choices are not to be relieved

from.

Id. at 198.

Likewise, even if Coltec's decision to settle was improvident in hindsight, the decision has been mad e and cannot be revisited. Cf. Schwartz, 976 F.2d at 218 ("We find no meaningful distinction between a motion asking f or relief from a decision not to appeal, as in Ackermann , an d one that asks for relief from a decision to settle, as in this
case."). The Court contrasted Ackermann's case to t hat of the successful Rule 60(b) petitioner in Klapprott v . United States, 335 U.S. 601 (1949), who also had failed to defend denaturalization charges but who had been in custod y, sick, unable to procure counsel despite efforts to do so, and preoccupied by efforts to protect himself against g rave criminal charges. Ackermann, 340 U.S. at 199-200. T he Court observed, "By no stretch of imagination can t he voluntary, deliberate, free, untrammeled choice of petitioner not to appeal compare with the Klapprott situation. " Id. at 200. The District Court did not err in determining that Coltec similarly must bear the consequences of its informed, counseled and voluntary decision.

Our decision in Boughner, 572 F.2d 976, which Colte c cites, granting Rule 60(b) relief, is distinguishab le from the facts of the present case. The Boughner appellants had lost summary judgment motions because their attorney, wh o failed to file opposing papers, was inexcusably neg ligent. Id. at 977. Coltec, unlike these litigants, deliberatel y chose to negotiate away its constitutional claims while acti vely represented by competent counsel.

Coltec also argues that it should not be punished f or serving the interests of judicial economy by bowing to the weight of then-existing decisional law holding the Coal Act constitutional instead of continuing constitutional litigation

20would have been borderline frivolous. It appeals to this

court's sense of justice, claiming that it is funda mentally unfair for it to be forced to pay unconstitutional Coal Act premiums when the government has waived the premium s of companies that had not yet paid the premiums and refunded premiums of companies that settled before

Eastern. See Blue Diamond Coal Co. v. Trustees of t he UMWA Combined Benefit Fund, 249 F.3d 519, 523 (6th Cir. 2001).

The Fund responds that Coltec is not similarly situ ated to the companies that did not settle because Coltec got the benefit of its bargain and, had Eastern turned out differently, it might have been in a better positio n than companies that did not settle. We agree. Enforcing Coltec's bargain is not a punishment and is not unfair. More over, this court has already rejected such disparate trea tment of "similarly" situated parties as a basis for Rule 60 (b) relief. We stated, "The only showing made in support of Rul e 60(b) relief in this case is that litigants who pursued a ppellate remedies fared better than litigants who did not. T he Marshall case explicitly forecloses Rule 60(b) reli ef on that ground." Fine Paper, 840 F.2d at 194.

The United States further contends that if Coltec p revails, the government will have no incentive to settle constitutional cases. The government persuasively a rgues that if Coltec is allowed to renege on the Stipulat ion and the Agreement, then:

any settlement involving the abandonment of constitutional claims would be illusory [and ][a]ny party that bargained away constitutional cla ims that later turned out to have merit could renege on its agreement. As a result, the United States wo uld have no incentive to enter into settlement agreem ents in [such] cases, and litigants would lose the a bility to trade constitutional claims -- even highly q uestionable ones -- for valuable consideration. [Further ,] . . . the

courts would be inundated with constitutiona l claims which could no longer be settled as well as parties seeking to reopen long-closed cases based on more recent precedent.

21Br. of United States at 12.

Finally, Coltec claims that the Fund will suffer no undue prejudice if Rule 60(b) relief is granted. To the c ontrary, the Fund would in fact lose the benefit of the bargain it made with Coltec. Like Coltec, the Fund took a deliberat e risk --

which in fact materialized when it lost NMA-- in ex change for a particular benefit, the security of the conte mplated escrow. If Coltec were to prevail, the Fund would b e prejudiced by losing the benefit it earned. For the se reasons, the District Court did not abuse its discr etion by failing to grant Coltec's Rule 60(b) motion.16

3. Other Post-Eastern Rulings on Rule 60(b) Motions by Coal Companies

Our conclusion that the District Court properly den ied Coltec's Rule 60(b) motion is in line with the deci sions of the other courts that denied relief sought by compa nies which settled or paid premiums pursuant to final judgments before Eastern. In Blue Diamond Coal, a c oal company that had paid the Coal Act premiums it owed after unsuccessfully litigating its constitutional claims all the way to the Supreme Court, Blue Diamond Coal Co. v. Chater, 519 U.S. 1055 (1997) (denying writ of certi orari), moved for Rule 60(b)(6) relief. The district court granted relief, Blue Diamond Coal Co. v. Shalala (In re Blu e Diamond Coal Co.), No. 3:93-CV-473, 1998 U.S. Dist. LEXIS 2 2711 (E.D. Tenn. Nov. 4, 1998), but the Court of Appeals for the Sixth Circuit reversed, stating that a change in de cisional law, even when based on constitutional principles, is generally insufficient to justify Rule 60(b)(6) rel ief. Blue Diamond Coal Co., 249 F.3d at 524. It rejected the district court's analogy to a line of cases which establishe s that post-judgment relief may be granted when litigants involved in the same transaction or injury get divergent jud gments

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16. Additionally, the District Court's denial of Co ltec's motion for

reconsideration based on the SSA letter was not an abuse of discretion.

The letter was not "new evidence" in that Coltec re ceived it while the Rule 60(b) motion was under consideration by the co urt. Moreover, the

District Court did not abuse its discretion because the letter is an extension of the Eastern decision; to the extent Ea stern does not justify Rule 60(b) relief, neither does the SSA letter.

22due to a change in decisional law, see id. at 525, because

those cases involve "transactions with a much tight er nexus . . . than a law passed by Congress to regulate the payment
of medical health benefits to the retirees of an en tire industry." Id. at 526. It also found that the equit ies favored denial of relief, citing the general interest in fi nality. The Court of Appeals noted that the judgment had been f ully executed before Eastern was decided. See also Templ eton Coal Co. v. Apfel, No. 93-158 (S.D. Ind. Nov. 17, 1 999) (denying Rule 60(b)(6) relief to coal company that had lost its constitutional challenge in district and circui t court and filed a petition for certiorari which was denied by the Supreme Court); Davon, Inc. v. Apfel, No. 93-198 (S .D. Ind. Nov. 17, 1999) (same).

The case with the facts most similar to this one is Holland v. Virginia Lee Co., 188 F.R.D. 241 (W.D. V a. 1999). Virginia Lee had paid the Fund a set amount in sett lement of all past and future premium liability before the re was any binding law in the Fourth Circuit as to the constitutionality of the Coal Act. The district cou rt in Virginia Lee denied the company's Rule 60(b)(6) mot ion, finding that it had no grounds for relief from its voluntary

settlement and could not otherwise show extraordina ry circumstances. The court emphasized the extraordina ry nature of subsection (6) relief, noting that a chan ge in law does not, alone, justify such relief, even when the change is based on constitutional principles, and it rejected various fairness arguments similar to those made by Coltec here. Id. at 254-55. The court also rejected the companie s' argument that their SSA letters justified relief, f inding that these letters were not meant to affect final judgme nts and that, in any case, the SSA does not have the author ity to do so. Id. at 256; see also Lindsey Coal Mining Co. Li quidating Trust v. Apfel, No. 94-143 (W.D. Pa. Aug. 4, 1999) (denying relief to a coal company that lost its constitution al challenge in district and appeals court and did not petition for certiorari, based in part on the District Court 's denial
here).

23C. The District Court's Award of Seven Million Doll ars to

the Fund

Coltec argues that the District Court had no "juris diction" to award monetary damages to the Fund because the F und did not request any monetary damages and did not pr evail on its one declaratory judgment counterclaim.17 In response, the Fund points out that it asked for suc h relief as was just, and argues that the judgment is author ized by Federal Rule of Civil Procedure 54(c) which provide s that "every final judgment shall grant the relief to whi ch the party in whose favor it is rendered is entitled, ev en if the party has not demanded such relief in the party's pleadings." Fed. R. Civ. P. 54(c); see also Kirby v . HUD, 745 F.2d 204, 207 (3d Cir. 1984) ("As long as the plain tiffs have stated a claim for relief, it is the court's obliga tion to grant the relief to which the prevailing party is entitle d whether it has been specifically demanded or not.").

In awarding the Fund some seven million dollars, th e District Court enforced the "so ordered" Stipulatio n and the Agreement, and the court certainly had the authorit y to do so. See Halderman v. Pennhurst State Sch. & Hosp., 901 F.2d 311, 317 (3d Cir. 1990) (holding that courts h ave jurisdiction to enforce settlement agreements incor porated into orders); Washington Hosp. v. White, 889 F.2d 1 294, 1299 n.9 (3d Cir. 1989) (holding that the fact that court had "so ordered" stipulation gave document"the same effect as a consent order or consent decree" and ga ve the court jurisdiction to enforce it). As the Fund argu es, its entitlement to pre-Eastern premiums arises from the Agreement, not the Coal Act. This renders irrelevan t Coltec's lengthy discussion of the court's lack of authority under the Coal Act to impose liability on it. The r eal issue is whether the Stipulation, in conjunction with the Agreement, which was "so ordered," authorizes the judgment imposed by the court.

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17. Coltec also asserts it would be illegal for it to pay the Fund without Coal Act liability, under the Labor Management Rela tions Act S 302, 29 U.S.C. S 186 (barring employer gifts to labor organ izations). However, S 302(c)(2) exempts "payment . . . of any money . . . in satisfaction of a judgment of any court . . . or in compromise, adjus tment, settlement, or release of any claim." 29 U.S.C. S 186(c)(2).

24Coltec contends that the Stipulation does not provi de a

basis for the award. It asserts that the document i s unambiguous and very limited, arguing that no langu age in the Stipulation can be construed as an admission of liability, an acknowledgment that any of its retire e assignments or premium assessments are valid, or an agreement to make premium payments. It claims that the District Court erroneously augmented the plain mean ing of the Stipulation by resorting to the "context" of th e document when there had been no showing of any ambiguity. We reject this contention. As we previou sly noted, the language of the Agreement and Stipulatio n supports the District Court's interpretation of the parties' deal. Simply put, the Fund is entitled to the money pursuant to the parties' bargain.

The District Court's finding that the Fund was, in these circumstances, entitled to the disbursement it requ ested is unexceptional. Coltec argues, however, that the Agr eement and the Stipulation reference "Coal Act premiums" a nd that, in light of the SSA letter, it did not have a ny statutory premium liability at the time of the judgment. This argument is easily disposed of because the premiums referred to in the Stipulation and the Agreement cl early refer to the premiums due before Eastern was decide d. App.

at 232.

IV.

CONCLUSION

In sum, Coltec made a binding agreement with the Fu nd when it signed the Agreement, the Escrow Agreement, and the Stipulation. The District Court found no basis in the Supreme Court's ruling in Eastern to allow Coltec t o back out of its agreements, nor do we. Because Coltec fa iled to open and maintain the escrow account as represented to the court and to the Fund, Coltec does not deserve relief from the agreements it freely entered.

For the reasons described herein, the order and the judgment of the District Court are affirmed.

25A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

26