Raven v. Oppenheimer & Co., Inc. , 74 F.3d 239 ( 1996 )

United States Court of Appeals,
Eleventh Circuit.
No. 94-9157.
Jonathan RAVEN, Eli Shapiro, Plaintiffs-Appellees,
v.
OPPENHEIMER & CO., INC., Wendy's International, Inc., J. Michael
Bodnar, R. Wayne Lewis, Howard E. Sachs, Professional Restaurant
Services, Inc., Defendants-Appellants.
Jan. 22, 1996.
Appeal from the United States District Court for the Northern
District of Georgia. (No. 1:89-cv-2046-RCF), Richard C. Freeman,
Judge.
Before EDMONDSON and BIRCH, Circuit Judges, and HENDERSON, Senior
Circuit Judge.
PER CURIAM:
The present appeal arises from an order of the United States
District Court for the Northern District of Georgia reinstating
this securities fraud action pursuant to § 27A(b) of the Securities
Exchange Act of 1934, 15 U.S.C. § 78aa-1, and Fed.R.Civ.P.
60(b)(6), after the action was dismissed as time-barred in
accordance with Lampf, Pleva, Lipkind, Prupis & Petigrow v.
Gilbertson, 501 U.S. 350, 111 S. Ct. 2773, 115 L. Ed. 2d 321 (1991)
("Lampf "), and James B. Beam Distilling Co. v. Georgia, 501 U.S.
529, 111 S. Ct. 2439, 115 L. Ed. 2d 481 (1991) ("Beam "). We reverse.
I. BACKGROUND
The plaintiffs, holders of securities offered by the Wendco
Northwest Limited Partnership, filed this lawsuit on May 26, 1989
in the United States District Court for the Northern District of
Illinois. The complaint alleged violations of Section 10(b) of the
Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), Rule 10b-5 of
the Securities and Exchange Commission, 17 C.F.R. § 240.10b-5, the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §
1961 et seq. ("RICO"), and state common law. On August 18, 1989,
the case was transferred to the United States District Court for
the Northern District of Georgia as authorized by 28 U.S.C. §
1404(a). Thereafter, on June 20, 1991, the United States Supreme
Court rendered its decisions in Lampf and Beam. In Lampf, the
Court rejected the practice of utilizing state statutes of
limitation for private causes of action arising under § 10(b) and
Rule 10b-5 and announced a uniform federal time frame requiring the
commencement of such actions within one year after the discovery of
the violation and no later than three years from the date of the
alleged violation. Lampf, 501 U.S. at 361-62, 111 S.Ct. at 2781-
82, 115 L. Ed. 2d at 335-36. In Beam, the Court held that when a new
rule of federal law is implemented in the case announcing the rule,
it must be extended retroactively to all pending cases. Beam, 501
U.S. at 541-44, 111 S.Ct. at 2446-48, 115 L. Ed. 2d at 492-93.
Because the limitation period required by Lampf was applied to the
litigants in that case, this court recognized, in Lufkin v.
McCallum, 956 F.2d 1104, 1108 (11th Cir.), cert. denied, 506 U.S.
917, 113 S. Ct. 326, 121 L. Ed. 2d 246 (1992), that it must be
enforced with respect to similarly situated parties. See Henderson
v. Scientific-Atlanta, Inc., 971 F.2d 1567, 1569 (11th Cir.1992),
cert. denied, --- U.S. ----, 114 S. Ct. 95, 126 L. Ed. 2d 62 (1993).
After Lampf and Beam were decided, the district court held
that the plaintiffs' § 10(b) and Rule 10b-5 claims were time-barred
and that the complaint failed to state a claim on the RICO cause of
action. Because no federal claims remained, the court declined to
exercise pendent or supplemental jurisdiction over the state law
counts. See 28 U.S.C. § 1367(c)(3). A judgment dismissing the
federal causes with prejudice and the state law claims without
prejudice was entered on October 16, 1991. The plaintiffs did not
appeal and, therefore, the judgment became final thirty days later.
See 28 U.S.C. § 2107(a).
On December 19, 1991, Congress amended the Securities Exchange
Act of 1934 by enacting § 27A. It provides:
Sec. 27A. (a) Effect on Pending Causes of Action.—The
limitation period for any private civil action implied under
section 10(b) of this Act that was commenced on or before June
19, 1991, shall be the limitation period provided by the laws
applicable in the jurisdiction, including principles of
retroactivity, as such laws existed on June 19, 1991.
(b) Effect on Dismissed Causes of Action.—Any private
civil action implied under section 10(b) of this Act that was
commenced on or before June 19, 1991—
(1) which was dismissed as time barred subsequent to
June 19, 1991, and
(2) which would have been timely filed under the
limitation period provided by the laws applicable in the
jurisdiction, including principles of retroactivity, as
such laws existed on June 19, 1991,
shall be reinstated on motion by the plaintiff not later than
60 days after the date of enactment of this section.
Pub.L. No. 102-242, § 476, 105 Stat. 2236, 2387 (1991) (codified at
15 U.S.C. § 78aa-1).
On February 14, 1992, the plaintiffs filed a motion to
reinstate their claims under § 10(b) and Rule 10b-5 in accordance
with § 27A(b). The defendants opposed the revival of the lawsuit
on the ground that the statute was unconstitutional. The district
court certified the constitutional question to the United States
1
Attorney General in accordance with 28 U.S.C. § 2403(a), and
directed the parties to submit additional argument on point. In
subsequent briefing, the plaintiffs asserted that, even if § 27A(b)
was unconstitutional, the prior judgment dismissing the § 10(b) and
Rule 10b-5 claims could be set aside under the authority of §
27A(a) and Fed.R.Civ.P. 60(b)(6).2 After considering the
contentions of the parties and the views of the United States, on
September 24, 1992, the district court held that § 27A was
constitutional in its entirety and granted the plaintiffs' motion
to reinstate their claims pursuant to that statute. The court also
stated in a footnote that it found "merit in plaintiff's [sic]
request to reinstate the action under Fed.R.Civ.P. 60(b)" and
therefore "grant[ed] that motion independently." (R6-100 at 25 n.
9).
On September 1, 1994, the district court amended its order
dated September 24, 1992 to declare that it warranted interlocutory
appellate review and stayed the proceedings until further order.
This court subsequently granted permission to appeal. See 28
U.S.C. § 1292(b) (allowing appeals to be taken in civil cases from
decisions not otherwise appealable when the district court states
1
Section 2403(a) directs that, in actions attacking the
constitutionality of an Act of Congress affecting the public
interest, "the court shall certify such fact to the Attorney
General, and shall permit the United States to intervene for
presentation of evidence, if evidence is otherwise admissible in
the case, and for argument on the question of constitutionality."
2
Rule 60(b) permits a court to relieve a party from a final
judgment for certain specified reasons such as mistake, newly
discovered evidence or fraud. Subsection (b)(6) is a catch-all
provision which empowers a court to do so for "any ... reason
justifying relief" not otherwise enumerated.
in writing that the "order involves a controlling question of law
as to which there is substantial ground for difference of opinion
and that an immediate appeal from the order may materially advance
the ultimate termination of the litigation").
II. DISCUSSION
In the first round of briefs filed on appeal the parties
reiterated the arguments they had asserted in the district court.
The defendants urged us to reverse the district court's order on
the grounds that § 27A(b) contravenes the separation of powers
doctrine and the due process clause. The plaintiffs defended the
constitutionality of the statute and responded that, in any event,
the district court could revive the action relying on Fed.R.Civ.P.
60(b)(6) as its authority. Shortly thereafter, however, the
Supreme Court decided Plaut v. Spendthrift Farm, Inc., 514 U.S. ---
-, 115 S. Ct. 1447, 131 L. Ed. 2d 328 (1995). In Plaut, a majority of
the Court held that § 27A(b) runs afoul of the separation of powers
doctrine and "is unconstitutional to the extent that it requires
federal courts to reopen final judgments entered before its
enactment."3 Id. at ----, 115 S.Ct. at 1463, 131 L. Ed. 2d at 356.
In a supplemental brief filed with this court the plaintiffs now
concede, as they must, that the district court was without
authority to give new life to the § 10(b) and Rule 10b-5 claims
under § 27A(b) because that subsection of the statute is
unconstitutional. They continue to maintain, however, that
3
The Court in Plaut declined to decide whether § 27A(b) also
offends the due process clause because the case could be decided
on the narrower separation of powers issue. Plaut, 514 U.S. at -
---, 115 S. Ct. at 1452, 131 L.Ed.2d at 341-42.
reinstatement was permissible under Fed.R.Civ.P. 60(b)(6).4
Rule 60(b)(6) provides an "extraordinary remedy" by which a
district court may, in its discretion, relieve a party from a final
judgment in order to do justice. Ritter v. Smith, 811 F.2d 1398,
1400 (11th Cir.), cert. denied, 483 U.S. 1010, 107 S. Ct. 3242, 97
L. Ed. 2d 747 (1987). The district court did not explain the basis
upon which it found merit in the plaintiffs' Rule 60(b)(6) motion.
The plaintiffs' brief filed in support of the motion, as well as
their briefs submitted on appeal, make it clear, however, that the
request was premised on an argument that § 27A(a), which was held
constitutional by this court in Henderson, 971 F.2d at 1575,5
established a new statute of limitations for all § 10(b) actions
filed on or before June 19, 1991,6 and that Rule 60(b)(6) relief
4
We note that although the district court's order declaring
the propriety of interlocutory appeal did not specifically
mention the need for an appellate decision on the Rule 60(b)(6)
question, the scope of interlocutory appellate review under 28
U.S.C. § 1292(b) "is not limited to the precise question
certified by the district court because the district court's
order, not the certified question, is brought before the court."
Aldridge v. Lily-Tulip, Inc. Salary Retirement Plan Benefits
Comm., 40 F.3d 1202, 1207 (11th Cir.1994), cert. denied, --- U.S.
----, 116 S. Ct. 565, --- L.Ed.2d ---- (1995). We find that the
resolution of this issue will "materially advance the ultimate
termination of the litigation" and, thus, exercise our discretion
in favor of reaching this question as well. 28 U.S.C. § 1292(b).
5
In Henderson, the court found that Congress possessed the
constitutional authority to dictate the method for determining
the statute of limitations in a pending § 10(b) lawsuit. The
Supreme Court's decision in Plaut construing § 27A(b), which
addressed the revival of cases finally adjudicated, does not
affect the validity of the holding in Henderson.
6
A better characterization of the effect of § 27A(a) is that
it restored, in § 10(b) cases filed on or before June 19, 1991,
the old method of calculating the statute of limitations
overruled by Lampf.
may be founded upon such a change in the law. We presume,
therefore, that the district court employed this reasoning in
granting the motion. The defendants contend this was error because
§ 27A(a) has no application to the facts of this case.
We agree that the revival of this action does not fall within
the purview of § 27A(a). We begin our analysis by observing that,
in construing the effect of a statute, we must look to its language
and design as a whole. United States v. Chandler, 996 F.2d 1073,
1084 (11th Cir.1993), cert. denied, --- U.S. ----, 114 S. Ct. 2724,
129 L. Ed. 2d 848 (1994). The text of § 27A(a) states that it
applies to "any" § 10(b) action commenced on or before June 19,
1991. The word "any" is capable of more than one meaning,
depending on the context in which it is used.7 When viewed in the
context of § 27A as a whole, it becomes evident that the term "any"
in subsection (a) does not include lawsuits that were dismissed as
time-barred after June 19, 1991, which are governed by subsection
(b).
The heading of subsection (a), which refers to "Pending Causes
of Action," is further evidence that Congress did not intend for it
to apply to all § 10(b) actions filed on or before June 19, 1991,
as urged by the plaintiffs. Although section headings may not be
used to limit the plain meaning of the text of a statute, they may
be employed as tools of interpretation when the text is ambiguous.
7
"Any" may refer to "one, a, an, or some," or "one or more
without specification or identification." The Random House
College Dictionary 61 (1st ed.1980).
United States v. Castro, 837 F.2d 441, 442 n. 1 (11th Cir.1988). 8
As we have stated, the word "any" is unclear unless put into
context. We find that the phrase "any private civil action" in
subsection (a), when considered in conjunction with the
subsection's heading and with subsection (b), was designed to
encompass only those § 10(b) complaints which were pending on
December 19, 1991. Without belaboring the meaning of the term
"pending," see Georgia Ass'n of Retarded Citizens v. McDaniel, 855
F.2d 805, 809 (11th Cir.1988) (recognizing that the word "pending"
is open to varying interpretations depending on the circumstances),
cert. denied, 490 U.S. 1090, 109 S. Ct. 2431, 104 L. Ed. 2d 988
(1989), it cannot be said that the present action was pending on
December 19, 1991. We accordingly hold that the district court
abused its discretion by granting Rule 60(b)(6) relief founded upon
an application of § 27A(a).9
III. CONCLUSION
In keeping with the foregoing analysis, the district court's
8
This is so only when the heading is part of the act as
written and passed by Congress and not added by those responsible
for codification. Castro, 837 F.2d at 442 n. 1. The heading of
subsection (a) was included in Congress's enactment of § 27A.
See 105 Stat. at 2387.
9
The defendants also argue that a congressional, as opposed
to a judicial, change in the law may never be used to set aside a
final judgment under Rule 60(b)(6). Cf. Ritter, 811 F.2d at 1401
(a judicial reconstruction of what the law is may provide the
"truly extraordinary circumstances necessary" to support Rule
60(b)(6) relief). That Congress may not mandate the reopening of
a final judgment is obvious in light of Plaut. Whether the
separation of powers problem may somehow be avoided by seeking
Rule 60(b)(6) discretionary relief premised upon a new
congressional pronouncement seems doubtful. We need not decide
this thorny issue, however, given our conclusion that § 27A(a),
upon which the plaintiffs sought Rule 60(b)(6) relief, governs
only those cases still pending on December 19, 1991.
order reinstating the plaintiffs' § 10(b) and Rule 10b-5 claims is
VACATED.