Court Opinion

ID: 9883539
Source: CourtListenerOpinion
Date Created: 2023-10-06 01:46:25.337053+00
Date Added: 2024-06-11T07:48:25.039781
License: Public Domain

HARTZ, Circuit Judge,
joined by McCONNELL, Circuit Judge,
concurring/dissenting:
I join all of Judge Tymkovieh’s opinion except Section III(C), entitled “Prospectivity.” In my view, our decision overruling Andersen v. UNIPACNEBHELP (In re Andersen), 179 F.3d 1253 (10th Cir.1999), should be retroactive. I respectfully dissent from my colleagues’ contrary view.
In reaching this conclusion I do not need to adopt the view of the concurring opinions by Justices Blackman and Scalia in James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 547, 111 S.Ct. 2439, 115 L.Ed.2d 481 (Blackman, J., concurring), 548 (Scalia, J., concurring) (1991), that the Constitution sets limits on prospective overruling. I simply would say that the factors set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971), compel retroactivity. Chevron’s three factors are (1) whether the decision whose retroactivity is in question “established] a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed,” id. at 106, 92 S.Ct. 349 (citation omitted); (2) “whether [in light of the history, purpose, and effect of the rule] retrospective operation will further or retard its operation,” id. at 107, 92 S.Ct. 349; and (3) “the inequity [if any] imposed by retroactive application, [recognizing that] where a decision ... could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the injustice or hardship by a holding of nonretroactivity,” id. (internal quotation marks and brackets omitted).
The first factor (that we are overruling a precedent) is the only one that favors pros-pectivity, and even then, the weight of the factor is reduced somewhat because the criticism of Andersen by other circuits (perhaps portending overruling by the Supreme Court) and by our own opinion in Poland v. Educational Credit Management Corp. (In re Poland), 382 F.3d 1185, 1189 n. 2 (10th Cir.2004), suggests that Andersen could be the source of only a cautious reliance.
The other two factors support retroac-tivity. The underlying rationale for our decision in this case is that a creditor should not be deprived of its rights in a bankruptcy proceeding unless it receives proper notice (and then can litigate the issue in an adversary proceeding). Proper notice is fundamental to our conception of fair procedure. To apply our decision purely prospectively is to bless a prior denial of legal rights without a fair procedure. Such application does not advance, but retards, the operation of the legal principle pronounced by today’s decision. In our legal tradition we do not turn a blind eye to prior deprivations of fair procedure. *1054When a person does not receive constitutionally adequate notice of a legal proceeding, the person is not bound by a resulting judgment. See Orner v. Shalala, 30 F.3d 1307, 1310 (10th Cir.1994), see also Foster v. Arletty 3 Sarl, 278 F.3d 409, 414 (4th Cir.2002). The majority opinion fails to explain why we should not employ the same approach when notice is inadequate under a statute. Indeed, I do not understand how the opinion can refuse to apply our overruling of Andersen retroactively without considering whether constitutional due process requires the overruling.
As for the third factor, the majority opinion misconceives the impact of retroac-tivity. Retroactivity will not cause any massive reopening of old cases. We are concerned solely with cases in which the bankruptcy court has entered an order discharging a student loan. Such an order can be reopened only under Fed.R.Civ.P. 60(b). But a motion to reopen under that rule must “be made within a reasonable time.” Fed.R.Civ.P. 60(b); see Foster, 278 F.3d at 414. Given the nature of bankruptcy proceedings, a “reasonable time” should be a relatively brief period after the creditor has knowledge or adequate notice of the discharge of the debt. In the Mers-mann litigation, for example, ECMC filed its Rule 60(b) motion about three months after the discharge order, and that order actually excepted the student loan from discharge. Although the matter should be addressed by the bankruptcy court in the first instance, it certainly appears that ECMC acted with reasonable promptness. I see no likelihood of “substantial inequitable results” if our opinion were retroactive.